Thank you sir…Very nice article
Thank you sir…Very nice article
The stock market has fascinated people in India for years now. They are seen as the quickest way to earn liquidity. However, some investors have actual knowledge of the stocks and the stock market. For many, they are tickers of prices going up and down. If the ticker goes up, you earn money. If it goes down, you lose. This could be the start and end of the story.
For a thoughtful investor, it is more than the market going up and down. They look at it as real and live businesses in action. Thoughtful investors realise they need a Demat Account as well as the trading account in place.
What is the relation between a Demat Account and stock investment?
Demat Accounts are used to store your shares and other financial securities in electronic form. It works similar to a bank account. This process is called dematerialisation. You can also rematerialise the certificates from electronic to physical instantly. You also need a trading account side by side where you can perform the act of buying and selling securities. The shares are debited from the Demat Account and sold in the market via a trading account. The proceedings from the sale are credited to your bank account.
Hence, investments in the stock market require both a Demat Account and trading account. Nowadays, banks offer investors 2-in-1 offer, i.e. opening bank account, Demat Account, and trading account in one place.
Regards,
Kamlesh Patel
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