Three accounts, one trade

Watch the green arrows.

To buy and sell shares you need three accounts that work together. Watch where the **money** and the **shares** go.

Money lives in the **bank** and **trading** accounts. Shares live in the **demat** account.

What each account does

• Trading account opened with a stock broker — Where you **buy and sell**. You use it to place orders and to keep the cash you're about to invest.
• Demat account opened through a depository participant (DP) — Where your shares are **held**, electronically, at NSDL or CDSL. Think of it as a digital vault.
• Bank account linked to your trading account — Money moves in and out of your trading account only through a bank account **in your name** that you've linked.

Shares used to be paper certificates. Turning them into electronic records is called **dematerialisation**, which is where **demat** comes from.

Move money and shares

Press play, or tap each step.

Example prices. Charges, and the time it takes shares and money to arrive, come in later lessons.

Trading account or demat?

Switch between buy and sell.

Beginners often mix these two up. Switch between a buy and a sell.

**Remember:** trading account = where you **act**. Demat account = where you **hold**.

Check — Question 3 of 4

Which account is it?

What you now know

• You need three linked accounts: trading, demat and bank.
• The trading account, opened with a broker, is where you place orders.
• The demat account, opened through a DP at NSDL or CDSL, holds your shares electronically.
• Money moves in and out only through a linked bank account in your name.
• Buying moves cash out of trading and shares into demat; selling does the reverse.