What is the difference between a trading account and a demat account?
Trading Account: A trading account enables you to execute trades in the stock market.
Demat Account: A demat account is where your securities are stored electronically. Instead of keeping physical share certificates, they are held in a digital format in this account. It ensures that your investments are safe and easily accessible, and it allows you to keep track of all your holdings in one place. Typically, when you place a buy or sell order in your trading account, your broker ensures that the relevant actions are reflected in your demat account.
Both of these accounts are managed by brokers on their client's behalf in the back end.