Short answer: In India, a trading account is the channel through which you place buy and sell orders for securities. The main types differ by the market they cover, how orders are placed, whether they are bundled with other accounts, and how much service the broker provides.
Last reviewed: 11 November 2026
At a glance
| Account type | What it covers |
|---|---|
| Equity trading | Shares, stock futures and options, and index derivatives |
| Commodity trading | Commodities, which need a separate commodity trading account |
| Offline | Orders placed by phone or in person, with physical contract notes |
| Online | Orders placed through a website or app, with electronic contract notes |
| 2-in-1 or 3-in-1 | Trading and demat accounts; 3-in-1 also adds a savings bank account |
| Discount broking | Low brokerage, often a flat fee, with no trading advice or research |
| Full-service | Higher charges for advice, research reports and a relationship manager |
What does an equity trading account cover?
An equity trading account lets you trade shares, stock futures and options, and index derivatives. A derivative is a contract whose value is based on an underlying asset, such as a share or an index.
The trading account does not hold your shares. That job belongs to a demat account, short for dematerialised account, which keeps your shares in electronic form. The two accounts work together: the trading account places the order, and the demat account records the shares you own.
The equity trading account is also not enough on its own for some activities. Subscribing to an initial public offering (IPO), which is a company’s first sale of shares to the public, requires a demat account. Holding delivered shares, meaning shares you have actually received rather than traded and squared off within the day, also requires one.
Why are commodities kept in a separate account?
Trading in commodities requires its own commodity trading account. An equity trading account cannot be used for commodities, even though both are used to place orders.
The practical effect is that an investor who wants to trade both shares and commodities needs to open and maintain two separate trading accounts. Each one has to be set up for its own market.
How do offline and online accounts differ?
An offline account requires you to place orders by phone or in person. The broker keys the orders into the system for you, and the broker issues physical contract notes, which are paper documents confirming the details of each trade.
An online account lets you place orders yourself through a website or app. It issues electronic contract notes instead of paper ones.
The catch with offline trading is that you depend on the broker to enter your order correctly. Checking the physical contract note is how you confirm what was actually executed, and that check arrives on paper rather than on your screen.
Why do some accounts bundle trading, demat and savings?
A 2-in-1 account combines the trading and demat accounts. A 3-in-1 account also adds a savings bank account. Either way, you need only one or two accounts instead of three.
Here is a hypothetical example, with invented numbers for illustration only. Suppose an investor opens a separate trading account, demat account and savings account. That is three accounts to track, with three sets of details to keep up to date. A 2-in-1 setup reduces this to two, and a 3-in-1 setup reduces it to one.
Bundling is convenient, but it does not remove the need to understand each part. The trading account, the demat account and the savings account still do different jobs, so it helps to know which function each one serves.
How do discount and full-service brokers differ in cost?
A discount broking account charges low brokerage, often a flat fee per order, but it offers no trading advice or research. A full-service account charges more, in exchange for advice, research reports and a dedicated relationship manager.
Here is a hypothetical example, again with invented figures. Suppose you buy 100 shares at ₹500 each, a trade worth ₹50,000. A discount broker with a flat fee of ₹20 would charge ₹20 for that order. A full-service broker charging 0.5% of trade value would charge ₹250 for the same order. This example ignores any other charges.
The difference in cost is only part of the picture. The full-service fee pays for services, but a higher fee does not guarantee better trades. With a discount account, you do the research yourself, so the work and the responsibility stay with you.
Frequently asked questions
Can I trade shares with only an equity trading account?
You can place orders for shares, stock futures and options, and index derivatives through it. However, subscribing to an IPO and holding delivered shares both require a demat account.
Do I need a separate account for commodities?
Yes. Commodity trading requires a commodity trading account, and an equity trading account cannot be used for it.
Is an online account different from an offline one?
Yes. An online account lets you place orders through a website or app and gives you electronic contract notes. An offline account requires orders by phone or in person, with physical contract notes.
Does a discount broker give investment advice?
No. Discount broking accounts charge low brokerage, often a flat fee, but offer no trading advice or research.
Sources and last check
Facts in this article were checked against the sources below on 11 November 2026. Rules and figures can change; check the primary source before acting.
- icicidirect.com (broker education)
- kotakneo.com (broker education)
- upstox.com (broker education)
This article is general information, not investment advice. MyFinanceBandhu is not a SEBI-registered investment adviser.