A demo account is a simulated account used for practicing and learning purposes in a risk-free environment. It is typically offered by financial trading and investment platforms, such as forex brokers, stockbrokers, and investment firms, to allow individuals to test out their platform and try out different trading strategies without the need to commit real funds. A demo account is funded with virtual money, which means that any profits or losses incurred do not reflect real money.

On the other hand, a live account is a real account that is funded with real money, and any profits or losses incurred reflect real money. A live account is suitable for individuals who are ready to trade or invest with real funds and are comfortable with the risks involved. It is important to note that the conditions of a live account, such as spreads, commissions, and execution, may differ from those of a demo account, so it is crucial to fully understand and evaluate the risks and rewards before committing real funds.