How are trading account, demat account and bank accounts linked?

How are trading account, demat account and bank accounts linked?

This mainly happens in the backend. The process is done by the stock broker themselves. A point that needs to be made here is that, when the accounts are linked, there may not be any charges to transfer the free balance from trading a/c to bank a/c.

A trading account is used to purchase and sell equities on the stock exchange. A trading account includes not just stocks, but also cash, securities, and other sorts of assets. A Demat account is mostly required to complete specific transactions through a trading account. Whereas, a dematerialised (Demat) account allows you to hold your financial items electronically. A demat account is used to keep your shares, whilst a savings account is meant to hold your money. A savings account, on the other hand, is a deposit account in which you store your money and earn a modest interest from the bank, ensuring the safety of the money put. It makes it easy to save and retrieve cash in your bank account.

The money is deposited in the Savings account to transfer cash for buying shares, and it is utilized to receive funds when the shares are sold. The funds are moved to the Trading account for the purpose of purchasing and selling securities. Following that, the securities are digitally placed in the Demat account. All of these accounts are linked to one another and are interdependent.