How to link a demat account with a trading account? Here's a step-by-step guide

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emat account indispensable for participation. A demat account not only facilitates trading but also serves as a repository for various securities. In addition to shares, it can hold debentures, sovereign gold bonds, ETFs, government bonds, mutual funds, tax-free bonds, certificates of deposit, and more.

While a demat account acts as a secure vault for securities, a trading account serves as the gateway for buying and selling shares. Typically linked to a bank account, the trading account requires integration with a demat account for seamless trading operations. A trading account enables straightforward investment activities like share transactions as well as more complex trading maneuvers such as intraday trading and dealing in futures and options.

Both the demat and trading accounts offer versatile functionalities, and linking the two ensures their combined utilisation. By linking the demat account with the trading account, investors can leverage the full spectrum of trading opportunities available in the Indian stock market. According to SEBI regulations, traders or investors are permitted to open or possess multiple demat accounts, with the only restriction being that each demat account must be opened with a different depository participant (DP).

This means that if someone wishes to open another demat account, they would need to approach a different depository participant. An individual can link a demat account from a DP with a trading account opened with a stockbroker. However, there's a caveat to consider.