Congrats that you have decided to invest in Shares. With BJP coming to power many people are expecting that we are entering a bull run and lots of money can be made in stock market. But if you are someone who has not invested in stock market till now, I will help you understand what you need to do to start trading soon.
Open a Brokerage (trading) account
You cannot just go to exchange and start trading on the stock market. You need to have a account with one of the brokers who are members of stock exchanges. Some of the largest stock brokers in India are ICICI Direct, ShareKhan and HDFC Security. They are what is known as full service brokers and they provide three in one account – Bank Account, Demat Account and Trading Account. They charge brokerage on higher side but if you are starting, do could be a good fit for you. With the increase in internet penetration in India, there are a different league of brokers know as Discount Broker which have started to operate in India. There have a very low brokerage but they provide most of the services online. Some of the main Discount brokers in India are Zerodha, RKSV and TradeJini. You can open an account online with them and start trading within 24 hrs with some of them.
To understand better about Full service vs Discount broker and read our reviews about major share brokers.
Open a Demat Account
Know a days you don’t get physical share certificates but electronic share. And Demat account is nothing but a locker to keep your e- shares. Most of the Brokers would provide you a service to open Demat account. Remember that Demat account is not maintained by Brokers but by NSDL – A Government of India enterprise. There is a charge of around Rs 300 to open a demat account and once opened there is a small yearly charge depending on the amount of share you have in your Demat Account.
So once you have opened a Brokerage account you can start trading in Futures and options but not take share delivery. But once you have Demat account you can take share delivery and trade accordingly.
For a detailed review about Demat account, please review Demat Accounts.
Documents required for opening account
This would depend on individual brokers but the common documents required to open account are :-
Crossed bank account Check – Your trading account would be linked with this bank account
Permanent address proof
2 color photograph
Filled account form – Most of the brokers have a long form to fill with all the required details.
Hope this article helped you to understand better about buying shares in Indian market.
In case you still have some questions unanswered, do ask me a question or surf this website and it will help you in choosing the right broker of your choice.