Different Types Of Trading And Demat Account
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Different Types of Trading and Demat Account

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If you want to trade or invest in the Indian stock market, there are a few basic things that you need to be aware of. One of the basic requirements for trading or investing in the stock market is to have a trading account and a demat account.

Despite the fact that these are the two most essential and basic requirements, a lot of people lack clarity on it. So, if you are someone who belongs to the same category, worry not as in this article we will help you understand everything about trading and demat account and their types.

While a demat account is used to hold your shares and securities in the dematerialised form, a trading account is an intermediary between your demat account and savings bank account.

Let us now look at the types of trading and demat account.

Different Types of Trading and Demat Account

Types of Demat Account

There are different types of demat account that serve specific purposes and each type of account has its own unique features that set it apart from the other types. Some of the common types of demat account are:

  • Regular Demat Account
    Regular demat account is ideal for people who want to invest in equity shares only. The shares purchased are stored digitally in an electronic form and when they are sold, they are taken from the stored place i.e. demat account. However, trading in futures and options does not require regular demat account because the futures and options contracts have an expiry date and there is no need to store them.
  • RepatriableDemat Account
    To allow the transfer of wealth abroad, repatriabledemat account is for non-resident Indians (NRIs).To open this type of demat account, it is compulsory to have a Non-Resident External(NRE) bank account. One can transfer shares to its Non-Resident Ordinary (NRO) demat account only after closing the regular demat account. There is a restriction to repatriate a maximum of USD 1 million in a calendar year i.e. January to December.
  • Non-RepatriableDemat Account
    Non-repatriabledemat account is also for non-resident Indians. This account does not allow you to transfer the funds abroad. It is compulsory to link the NRO bank account with the demat account.

Types of Trading Account

Just like a demat account, there are different types of trading account too. Although their basic characteristics may differ, they all serve the purpose of making trading an easy and hassle-free experience. Some of the common types of trading account are:

  • Equity Trading Account
    The equity trading account is enough when you want to trade in the equities or futures and options. Since the trading of shares does not require you to hold or store shares, there is no need for demat account.
  • Commodity Trading Account
    As the name suggests, the commodity trading account is for trading in the commodities. According to the SEBI regulation, you will be required to open a separate commodity trading account for dealing in commodity markets.
  • Offline Trading Account
    Under the offline trading account, there is no internet service. You will have to call the broker or meet him personally to carry out a trade.
  • Online Trading Account
    Online trading account provides you the facility to trade at your home or office using the internet. This trading account is more convenient for users and attracts lower brokerage.

If you intend to deal in shares and securities, it is advisable to open a demat and trading account with a reliable broker like Kotak Securities who can make your trading experience even more smooth and hassle-free. You can open both trading and demat account online by visiting our website.