Introduction

You must have heard of Demat Account and Trading account, but what about a 3-in-1 Demat Account? Ever heard of any such account in the stock market? Basically, a 3-in-1 account comprises a Demat account, a trading account and a savings account. So, with a 3 in 1 Demat account, you have access to trade shares (buy and sell in the share market), and then use a savings account to manage all transactions at one place. 

When it comes to investing in the stock market, having the right tools is crucial for success. One of the most efficient ways to streamline your investing process is by opening a 3-in-1 Demat account. But what exactly does this entail? 

Let’s break it down.

What is a 3 in 1 Demat Account? 

A 3-in-1 Demat account is an integrated financial account offered by many Indian banks and brokerage firms. It combines three essential accounts into one package: a Demat Account, a Trading Account, and a Bank Account. 

• Demat Account: This is where your securities, such as stocks, bonds, ETFs, and mutual funds, are stored electronically. It eliminates the need for physical certificates, making trading easier and safer.
• Trading Account: This account is used to place buy or sell orders in the stock market. It acts as a bridge between your Demat and Bank accounts.
• Savings Account: Your trading activities automatically debit or credit money from your linked savings account when you buy or sell securities.

A 3-in-1 Demat account simplifies the stock trading process by integrating all three accounts into a seamless experience. It’s especially convenient for new traders as well as experienced investors who want ease of transaction across different investment instruments. 

You may also want to know Low Brokerage Demat Account

How to Open a 3 in 1 Demat Account?

You can open a 3-in-1 Demat account easily by applying online or visiting a bank or brokerage branch. Here’s a step-by-step guide to help you understand the process in broader detail:

1. Choose a Bank or Brokerage Firm  

Start by selecting a bank or a brokerage firm that offers 3-in-1 Demat accounts. Banks like HDFC, ICICI, and Kotak Securities are well-known providers. Research the services, fees, brokerage rates, and customer support of different institutions before making your choice.

2. Check Eligibility  

Most financial institutions require you to be an Indian citizen over 18 years of age. Additionally, you should have valid identity proof, address proof, and a PAN (Permanent Account Number) card. Some banks may also require a minimum balance in the linked savings account.

3. Submit an Application  

Once you’ve chosen your provider, you can fill the 3-in-1 account application form. This can usually be done online through the bank or brokerage website. Alternatively, you can visit a branch and submit the physical form.

4. Provide KYC Documents  

During the application process, you will need to submit Know Your Customer (KYC) documents, such as:

• Identity Proof: Aadhaar Card, Passport, or Voter ID
• Address Proof: Utility bill, Passport, or Aadhaar card
• PAN Card: Mandatory for all investors in India
• Passport-size photographs

Many banks either let you upload these documents online or require you to submit physical copies at the branch.

Also, read our blog How to Open a Demat Account Without a PAN Card?

5. In-Person Verification (IPV)  

To comply with regulations, an in-person verification (IPV) may be required. For online applications, the bank or brokerage may conduct video KYC, where a representative verifies your identity over a video call. If you apply in person, this verification is done during your visit to the branch.

6. Bank Account Setup  

The bank account linked to your 3-in-1 Demat account will be used for trading and investments. If you don’t already have a savings account with the selected bank, you’ll need to open one. Some banks may offer zero-balance accounts specifically for this purpose.

7. Trading and Demat Account Setup  

Once your bank account is set up, the provider will proceed with opening your Trading and Demat accounts. You will receive account details, including login credentials, a trading ID, and a Demat account number, typically within a few business days.

8. Sign the Agreement  

Most institutions require you to sign a client agreement that outlines the terms and conditions for using their services. This agreement typically includes details about brokerage fees, transaction charges, and the responsibilities of both the customer and the brokerage firm.

9. Activate the Account  

After processing your application and verifying the required documents, the bank will confirm that your 3-in-1 Demat account is active. You’ll get access to the trading platform, where you can view and manage your holdings, place orders, and track your investments.

10. Start Trading  

After activation, you can start trading in stocks, mutual funds, bonds, and other securities. Your linked bank account automatically transfers funds to and from your trading account, and the Demat account stores your securities.

Now go with our new blog, How Does a Demat Account Work?

Components of 3 in 1 Demat Account

A 3-in-1 Demat account consists of three key components: the Demat Account, Trading Account, and Savings Account. Each of these plays a vital role in the seamless functioning of the account, especially for stock market transactions. Let’s break down each component in detail:

1. 3 in 1 Demat Account

The Demat (Dematerialized) Account is at the core of the 3-in-1 setup. Its primary function is to hold securities in electronic form, eliminating the need for physical certificates.

Key Features:

• Electronic Holding: All your securities, such as stocks, bonds, mutual funds, ETFs, and government securities, are held electronically. This reduces risks associated with loss, theft, or damage of physical certificates.
• Ease of Access: You can easily monitor and manage your portfolio online. You can check your holdings, buy or sell securities, and track your investments with just a few clicks.
• Automatic Updates: When you buy shares, they are credited to your Demat account, and when you sell them, they are debited. This happens automatically, ensuring accurate record-keeping.
• Corporate Benefits: You will automatically receive corporate benefits such as dividends, bonuses, or stock splits directly into your Demat account.

2. Trading Account

The Trading Account acts as the operational hub of your 3-in-1 account. This is the platform where you place buy or sell orders for securities in the stock market.

Key Features:

• Market Transactions: It allows you to place orders for buying or selling shares, bonds, or other financial instruments. Once an order is executed, it reflects in your Demat account.
• Link to Demat and Savings Account: The trading account links your Demat account, where your securities are stored, with your savings account, where your funds are kept. This connection ensures automatic fund transfers during trades, eliminating the need for manual intervention.
• Types of Trades: You can execute different types of trades, such as day trading (intraday), futures, options, or long-term investments, through your trading account.
• Access to Trading Platforms: Most brokers offer a variety of trading platforms, including web-based portals, mobile apps, and desktop platforms, to place orders easily and quickly.

3. Savings Account

The Savings Account is a regular bank account that is part of the 3-in-1 Demat account setup. It facilitates the transfer of funds for trading activities.

Key Features:

• Source of Funds: When you buy securities, your savings account automatically debits the required amount. Similarly, when you sell securities, your savings account receives the proceeds.
• Automatic Settlement: The integration ensures that all transactions related to stock purchases or sales are settled automatically. This eliminates the need for manual fund transfers between accounts.
• Interest Earning: The balance in your savings account can earn interest, just like a regular savings account. Some banks may offer higher interest rates if you maintain a larger balance.
• Account Management: You can also use this account for everyday banking needs, including deposits, withdrawals, and bill payments, in addition to its role in the 3-in-1 setup.

How Do These Components Work Together?

• When you buy securities, the system debits funds from your Savings Account and credits the purchased securities to your Demat Account.
• When you sell securities, it debits the shares from your Demat Account and credits the proceeds to your Savings Account.
• Your Trading Account facilitates the process, ensuring smooth execution of buy/sell orders on the stock exchange.

This integration of the Demat, Trading, and Savings accounts streamlines the entire trading process, and makes it convenient for investors. The 3-in-1 setup is particularly useful for beginners as it simplifies fund transfer, trade execution, and portfolio management, all within a single platform. 

Benefits of 3 in 1 Demat Account

A 3-in-1 Demat account offers numerous advantages for investors by integrating a Demat Account, Trading Account, and Savings Account into a single platform. Below are the 7 key benefits: 

1. Convenience and Efficiency  

A 3-in-1 Demat account simplifies the entire trading process by combining the three essential accounts needed for stock market participation—Demat, Trading, and Savings—into one seamless package.  

• You no longer need to manage separate accounts for holding securities, placing trades, or handling funds.  
• Fund transfers between the savings and trading accounts happen automatically, without requiring manual intervention, making the process fast and hassle-free.  
• With a single login, you can monitor your securities, execute trades, and manage funds, saving time and effort.

2. Cost-Effective Trading  

By opting for a 3-in-1 Demat account, you often benefit from competitive brokerage fees, especially when using a bank that offers this integrated solution.  

• Many banks and brokers offer discounted brokerage rates and lower transaction costs for customers using a 3-in-1 account compared to standalone accounts.  
• There’s reduced paperwork and transaction costs because everything happens within the integrated platform, minimizing the need for third-party services, which can be expensive.

3. Real-Time Monitoring  

A 3-in-1 Demat account provides real-time updates on your investments and transactions, giving you complete control and visibility over your portfolio.  

• Most platforms offer live dashboards where you can see your holdings, the current market value, and any recent transactions.  
• You can track your gains or losses instantly and make more informed decisions based on real-time data.
• Alerts and notifications help you stay on top of important events, such as corporate announcements, stock price movements, or dividends.

4. Streamlined Transactions  

With a 3-in-1 Demat account, the trading process becomes highly streamlined.  

• When you buy or sell shares, the system automatically debits or credits funds to your linked savings account, eliminating the need for manual transfers.

• Your securities are automatically credited to or debited from your Demat account based on your trades. This makes the whole process faster, more secure, and more efficient.  
• The seamless integration eliminates the delays associated with transferring money from a bank account to a trading account, allowing you to act quickly on market opportunities.

5. Safety and Security  

The electronic nature of a 3-in-1 Demat account ensures the safe holding of your securities, reducing the risk of theft, loss, or damage associated with physical certificates.  

• Platforms record all transactions and holdings digitally, and many provide two-factor authentication and other security measures to protect your account.
• The system automatically credits corporate actions like dividends, bonuses, or splits, ensuring you receive all benefits without missing out.

6. Diverse Investment Options  

A 3-in-1 account allows you to trade in a wide variety of financial instruments beyond just stocks, including bonds, mutual funds, ETFs, IPOs, and even commodities.  

• Having access to multiple asset classes from a single account makes it easier to diversify your portfolio, which can help in spreading risk.  
• You can also invest in mutual funds or fixed deposits directly from your savings account, providing added flexibility in managing your finances.

7. Access to Research and Insights  

Most banks and brokers offering 3-in-1 accounts also provide additional resources like market research, stock recommendations, and analytical tools.  

• These platforms often include real-time market data, investment tools, and expert advice to help you make informed decisions.  
• Access to in-depth analysis and reports allows investors, especially beginners, to understand the market better and execute more strategic trades.

Conclusion

In today’s fast-paced financial world, having a 3 in 1 Demat account can be a game-changer. It simplifies your trading experience, reduces costs, and provides a more organized approach to managing your investments. Whether you’re a seasoned trader or a newbie, the perks of opening a 3 in 1 Demat account are hard to overlook.

So, next time when you choose to open a Demat Account, do consider 3 in 1 Account as an option. If you are looking forward to open a Demat and trading account, get started with Jainam!