Demat account

A demat account holds your shares in electronic form. It is kept with a depository, CDSL or NSDL, through a depository participant, which is usually your broker. Shares you buy for delivery arrive in it, and shares you sell leave it.

A trading account and a demat account are different. The trading account places orders on the exchange, and the demat account holds what you own. Most brokers open both together.

Demat accounts can carry an annual maintenance charge (AMC). Small accounts can qualify as a basic services demat account, which pays less.