The Best 3-in-1 Trading Account in India Stock Market - ICICI, HDFC, SBI, Kotak

People who are new to trading and wish to open a trading account, frequently ask these questions-

• What is a 3-in-1 account?
• What is a 2-in-1 account?
• What is the difference between 3-in-1 account and 2-in-1 account?
• Which one is best, a 3-in-1 account or a 2-in-1 account?
• Which bank is best for a 3-in-1 account?

If you wish to open a trading account to trade in stocks, derivatives, IPO etc., you have two choices- 2-in-1 account and 3-in-1 account.

A 3-in-1 account includes a savings account from a bank, a demat account with either of the central depositories NSDL and CDSL and a trading account to buy and sell various financial instruments. All the accounts are jointly opened by a broker. Normally 3-in-1 accounts are offered by broking companies which are a part of a banking group like HDFC Securities, ICICI direct, Kotak Securities and Axis Securities.

A 2-in-1 account includes only a demat account and a trading account. There is no bank account linked to this account. A 2-in-1 account is generally offered by a non-banking broking company like Zerodha, Sharekhan, Indiabulls etc.

The only difference between a 3-in-1 account and a 2-in-1 account is the inclusion of a bank account in the package and the convenience it offers to a trader. Rest all remain same. The trading and the demat account offer same facilities in both types of account.

From trading convenience point of view, a 3-in-1 account works better than a 2-in-1 account. You need 3 things to trade in a financial instrument-

• Money or Funds
• A trading account that gives you access to a trading platform (web-based, installable platform or a mobile app) to help you make buy and sell transactions.
• A demat account from either of the central depositories, CSDL (Central Depository Services Ltd) or NSDL (National Securities Depository Limited), where the certificates of your holdings will be stored in the dematerialized or electronic form.

If you open a 3-in-1 account then it is easy and fast for you to move funds between your bank and trading account. The transfer of funds happen in real-time. So if you see a trading opportunity, and there aren't enough funds in your trading account, then you can quickly transfer the funds and execute your trade.

If you open a 2-in-1 account then you have to transfer your funds from other bank account to your trading account. This transfer can take time between a few hours to a day depending on whether you are transferring funds via IMPS, NEFT or a cheque. The broker or the bank may also charge you a fee for fund transfer.

So the choice between a 2-in-1 account or a 3-in-1 account comes down to your convenience.

All major banks SBI, ICICI, Axis, Kotak, HDFC etc., who have a brokerage company in its group offer 3-in-1 accounts. The features of most of the 3-in-1 accounts are similar. However, there are a few factors to consider while choosing the best 3-in-1 account-

• Minimum Balance requirement- Does the 3-in-1 account requires you to maintain a monthly, quarterly or yearly balance? In most cases, the savings account is a zero balance account and doesn't require maintaining any balance. However, some banks put a clause of minimum trading activity in your trading account. If you don't do the minimum trading activity then your bank account may be converted from a zero balance to a minimum balance account.
• Brokerage Charges- The brokerage charges varies from broker to broker. So compare the brokerage charges before choosing your 3-in-1 account.
• Segments- Not all brokerage companies facilitate trading in all segments like equity, derivatives, currency and commodities etc. So make sure that the bank you are opening a 3-in-1 account facilitates trading in segments of your choice.
• Trading facilities- It means trading tools, platform features and other trading assistance offered by brokers. You must also consider the quality trading tools, platform features, research advice, training tips etc., offered by the broker before choosing the right 3-in-1 account.