What is the difference between trading account and demat account?

Demat Account enables you to store all your holdings of certificates of shares in electronic form. But to buy them, first, you need a trading Account. Trading and Demat account are linked to each other but serve different purposes. Trading Account facilitates you to buy and sell securities on different exchanges and demat account facilitates you to hold those securities until you sell them. Trading and demat account both are to be open with the broker but demat account is managed by Depositories. Broker only serves as an intermediary (DP) between you and depositories.