What is a 3 in 1 demat account?
A 3 in 1 demat account is one that allows one to store securities (demat account), buy or sell them (trading account) as well as store your own funds (savings account). The demat account in a 3 in 1 account has to be associated with either of the two central depositories -- — CDSL and NSDL. Hence, 3 in 1 demat accounts are offered by those brokerage companies that are also part of a banking group.
How is a 3 in 1 demat account different from a 2 in 1 demat account?
The difference between a 3 in 1 Demat account and that of a 2 in 1 demat account is that a 3 in 1 Demat account includes a bank account in its main package. It offers a slightly higher degree of convenience to the trader. All other functions remain the same. A 2 in 1 demat account is a Demat cum trading account so that a trader can trade with ease. It offers the convenience of trading but remains separate from one’s bank account. A 3 in 1 account adds banking to the mix. In both types of account, as long as you have got it from the same broker, you get the same demat and trading facilities.
Why 3 in 1 Demat account is perfect for trading:
From a convenience point of view, trading through a 3 in 1 Demat account is highly convenient. It is even more convenient than using a 2 in 1 Demat account. Here are the three things required to trade with a 3 in 1 Demat account.
Funds or money required to buy or sell securities
Access to a web based or installable trading portal. This can be from one’s trading account and the portal will aid you in buying or selling your securities. The portal, software or app will be offered by the brokerage you choose to get your 3 in 1 account with.
Thirdly, you get a Demat account from either the National Securities Depository Limited or the Central Depository Services Ltd. Each of these central depositories is where your Demat account will rise where you can generate a certificate for your holdings to be stored in an electronic format.
Hence, assuming you open a three in one account with the goal of making your trading a lot more effective and fast, you will easily be able to move funds between these accounts. The transfer of funds will also occur in real time. Hence, when you encounter a trading opportunity that could generate high returns for you, you have the option to quickly transfer your funds and execute your trade in almost no time.
The alternative, with a separate Demat and trading account is that you will have to transfer the funds from your bank account to your trading account. This can take time especially if you have a bank account with a different company than your brokerage. The time taken can range anywhere from a few hours to an entire day. Your bank and your broker may alsocharge you for the transfer of funds between accounts if these accounts are separate entities. When the accounts are linked there is no charge associated with the transfer of funds.
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