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Demat or Dematerialised Account is the same as your other bank accounts but it lets you manage your shares and securities in the digital form. In the present time it is mandatory to maintain all the trading of stock markets in the Demat account but if you have 500 shares in your account, you can store it in physical forms too.

With the evolution and the rapidly growing digital world, we have hardly seen anyone going to the registered office or company to buy the shares or debentures as everything is done by sitting just at your home or office space.

To function a demat account, you should go to a depository participant who is registered with Securities and Exchange Board of India (SEBI) and act as an intermediator between investors and depositors.

Thus, there are reasons why you should have a demat account and avoid personal losses.

However, when it comes to differentiating between Demat account and trading account, you need to understand a hair-line difference between both of them. while Demat account holds all the financial securities like stocks, mutual funds, IPOs or NCDs in the account and does not allow to buy or sell it, the trading account comes with the option of buying or selling of the securities.