To answer this question, we first need to understand the difference between trading and Demat account, as both these concepts are often misunderstood.
What is a Demat Account?
A Demat account is an abbreviation for Dematerialised account. The purpose of this account is to hold securities like shares, bonds and other investments. These accounts were introduced in 1996 to help reduce the paperwork that was involved with trading and investing. The accounts are opened with National and Central depository services. A Demat account safely holds all your investments, securities, bonds, mutual funds, etc. electronically, doing away with the hassle of physical documents and the risk involved in maintaining and safeguarding them.
While a trading account is responsible for the accounting of all the securities, cash, commodities and other holdings. The trading account eases the investor, who can buy and sell securities as frequently as they desire. Trading can occur on a daily, weekly, or monthly basis. Usually, people who have trading accounts indulge in day-to-day buying and selling, and some may choose to hold the securities for the long term. A trading account is essential, and a prerequisite to participating in the share market. Without a trading account, one cannot trade in the market.
Trading accounts are unique to each person. Every account has a distinct online trading account identity. To set up a trading account one can take the assistance of online, discount broking firms or a traditional and conventional broker. One needs to take care of the minimum margin that is to be maintained in the account while trading.
To summarise, a Demat account is a place where the shares that have been bought are kept, and the shares sold are withdrawn from, and a trading account allows one to carry out the command, be it buying or selling securities. To begin trading, one needs to connect their bank, trading and Demat account.
Can One Open a Joint Trading Account?
The difference between the two accounts will help justify the answer, “Can I open a Joint trading account?” A trading account allows one to control the investments. One can choose to buy and sell as they wish. Hence, every individual needs to be in command of their finances and not dependent on a benefactor.
You need to understand that:
- One cannot open a joint trading account.
- But one can open a joint Demat account.
In a Demat account, there can be three holders, which is the maximum number of holders possible. The three holders of the account are the primary and two additional joint holders. Once the account has been opened changes cannot be made, and nobody can be added to the account. To make any changes, one has to open another Demat account.
This being said, here are a few things that you consider:
- One can have multiple trading and Demat accounts provided that they open it with different brokers.
- A broker would be an institution or a person that helps you carry out the trade. An example of a broker would be Choice India.
Choice India, helps you answer questions like,” How to open a trading account?” They have a trading platform that gives you access to investing at the click of a button. Investing has never been easier.
Choice India provides its clients with a free Demat account and trading account. This facility allows investors and traders to enjoy investing without paying additional charges. Investing starts early, and every penny invested is a step to securing and growing one’s money.
Furthermore, Choice India is a research advisory. They work and collaborate with industry experts and research analysts that identify opportunities and generate caution claims, if necessary. Analysing the market is an important task that helps investors keep abreast with the latest developments and gives them an early mover advantage. Additionally, with every Demat account, one needs to ensure that they get the right brokerage cost. Choice India ensures that it provides its customers with the best service. A good broker aids in the long term. Make a good investment today by opening an account with ChoiceIndia.