To begin buying and selling in share market or stock market in India, you must have a Demat and trading account. Demat and trading accounts in India are offered by the two depositories, NSDL and CDSL, via brokerage firm, often known as stock brokers or share brokers. The trading account is where you’ll place bids for buy or sell order and Demat account is for holding your shares in decentralized form. The trading of share in India stock market takes place on two stock exchange- the Bombay Stock Exchange i.e (BSE) and the National Stock Exchange i.e (NSE).
- Ensure you have sufficient risk capital to invest.
Risk capital is money you might be free to invest. This money is not utilized in paying your living expenses, repaying your money owed, or held in your retirement account. In other words, this is money you possibly can stand to lose (but obviously don’t wish to). Along with your retirement account, most financial professionals advise that you simply maintain about six month’s worth of wages in financial savings. This can be a good financial cushion to cowl unforeseeable life events, like losing your job or becoming sick.Any money left over after that is your risk capital.
Six month’s worth wage is a minimal amount to maintain in financial savings. For more safety, take into account saving a yr’s value or more.
- Decide your investment style.
In case your planning to invest on-line, you may need to determine what type of trades you will be making. If you happen to do more day trading, you may want a platform that is responsive and has low per-trade charges. Alternately, for those who plan to make long-term investments, you may afford a platform with greater trading charges that provides extra services. Your selections here will inform your choice of brokerage.
3.Find a broker
Step one is to find a stock broker or firm. Stock brokers are of two types- full service and discount. A full service broker offers quite a lot of services along with the buying and selling of shares such as Analysis and advise in addition to retirement and tax planning.
For example: for those who open your trading account with the bank subsidiary, it may be your Three in 1 account,i.e saving bank account, Demat account and an online buying and selling facility. Other full service brokers provide all these facilities except a savings account.
Discount brokers are new to India.They charge as much as low charges than full service broker and provide a no frill stock broking accounts. They solely provide the required trading facilities at least possible price.
Some good example of top brokers in share market i.e Motilal Oswal, ShareKhan, Angel Broking.
- Compare brokerage charges
Each broker charges commission and certain fees for processing traders order. These fees can differ from dealer to dealer.
Some give low cost on the basis of the amount of trade conducted.Take all this into consideration before opening an account. However do not over-emphasize the factors. You should understand the services provided.
- Complete KYC
You may go to the workplace of dealer or ask the dealer to send its consultant to your own home with the account opening form and The know your client form i.e KYC form.
You should fill up these forms and submit it together with the identification and address proof such as voter ID card, pan card, birth certificates, passport, ration card, aadhar card, and etc.
As soon as your application is verified you’ll be given your trading account detail.
