Module 1 ยท Stock Market Basics
To buy shares in India you need a demat account to hold them and a trading account to trade.
In India, shares are held electronically in a demat (dematerialised) account, managed by a depository - either NSDL or CDSL. Your demat account is where your shares live.
A trading account is what you use to place buy and sell orders through a broker. When you buy, shares move into your demat account; when you sell, they move out.
You also need a bank account linked to your trading account for the money to move in and out. Many brokers offer all three together.
Example: Infosys
To buy Infosys shares, you place an order in your trading account. On settlement, the shares are credited to your demat account and the money is debited from your bank account.
Where are your shares held after you buy them?
If you opened a brokerage account today, what documents would you need? Why does KYC exist?