Different Types of Trading Accounts in India Stock Market
A trading and demat account are essential to getting started with buying and selling securities in the Indian financial markets. A demat account helps you store your shares and securities in a dematerialised format, while a trading account makes it possible for you to buy and sell securities via an exchange.
In this context, there are different types of trading accounts that you need to know about. While they are essentially the same, in that they help you buy and sell securities, the key difference is the kind of securities that you can trade in, with these accounts.
So, let’s take a look at the different types of trading accounts you have.
- Equity and derivatives trading account
You can open this kind of trading account with any stock brokers registered with a recognized stock exchange like the National Stock Exchange or the Bombay Stock Exchange. Once you open these types of trading accounts, you can buy and sell equity shares and derivatives. There are two modes in which you can do this - online and offline.
- Commodity trading account
A commodity trading account is a kind of trading account that helps you buy and sell commodities. These trading account types are opened with commodity brokers, who are registered with commodity exchanges in India like the Multi Commodity Exchange (MCX) and the National Commodities and Derivatives Exchange (NCDEX). Once you’ve opened this account, you can trade in commodities just like you trade in equity.
A discount trading account is one where the brokerage charges are very low. This makes discount trading accounts the best types of trading accounts for beginners who are just getting started with the markets. Discount trading accounts typically come with no added services like advisory and research. If you’re looking for these added benefits too, then you’ll need a full service trading account.
- Full service trading account
A full service trading account not only allows you to buy and sell securities. It also offers a range of other services like financial advisory, market research and much more. Bear in mind that the costs are also accordingly higher, when compared with a discount trading account.
Conclusion
You can now open a free demat account and trading account online to get started with buying and selling different kinds of securities in the market. Without a trading and demat account, you cannot trade in the stock market in India. So, if you’re keen on getting started with trading, open your demat and trading account right away.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account