Open demat and trading account online
Everyone is aware that stock market investing is one of the most common methods for becoming rich by building a huge portfolio over time. The idea that investing in stocks is excessively complicated, on the other hand, is what keeps individuals from doing so. Beginner investors are apprehensive about investing in the stock market because they believe it is risky, time-consuming, and complex.
Don't worry; this guide will explain you how to invest in India's stock market. We provide step-by-step instructions to make the procedure easier for you.
1 If you don’t have a PAN card, get one.
All Indian nationals must have a PAN (Permanent Account Number) in order to conduct financial transactions such as paying taxes, opening a bank account, investing in mutual funds, and so on. The Tax Department allocates a 10-digit alphanumeric code to each individual in order to determine tax liabilities.
2 Choose a stock broker
Individuals cannot directly purchase or sell stocks on national stock exchanges such as the BSE and NSE. Instead, you'll need the assistance of brokers, or intermediaries.
A stockbroker is a person or corporation with the authority to buy and sell shares on the stock exchanges. The Securities and Exchanges Board of India (SEBI) is in charge of overseeing the country's stock market. Individuals and companies are granted a license by the SEBI to buy and sell shares on stock exchanges. Stockbrokers are individuals or companies who hold these licenses.
3 Setting up Demat and trading account
After you've chosen a broker (person, company, or online platform), you'll need to open a Demat and trading account.
A demat account is a digital storage account for stocks and shares in your name. Consider it a virtual stock portfolio. Stocks in the physical format cannot be kept in a Demat account. It can only hold shares that have been dematerialized. As a result, the name Demat was coined.
All of the shares you purchase from the market are stored in your Demat account in your name. Your Demat account will be drained as stocks are sold. The shares in your portfolio are reflected in your Demat account at all times.
4 Role of Depositary Participant
Apart from the Demat and trading account, there is one more term you should be familiar with before starting to trade on the stock market. This is the participant who holds the depository. In our country, there are two depositories:
National Securities Depository Limited (NSDL)
Central Depository Services Limited (CDSL)
Both of these depositories allow depository participants to keep their shares in their possession. Despite the fact that the depository participant sounds similar to your Demat account, it is not.
The Demat account displays the quantity of shares you own, whereas the trading account displays the buying and selling activity in your account. The shares you bought and traded are held by the depository participant.
While you open Demat and trading accounts, most brokers will register you for a depository participant.
5 Register for UNI (Unique Identification Number)- Optional
You'll need a UIN if you want to trade shares worth more than Rs. 1,00,000 in a single transaction (Unique Identification Number). You can receive the UIN from your broker. If you're a newbie, you won't require a UIN. You can sign up for it later if you decide to invest a lot of money in your trade.
It's time to start trading, now that you've completed setting everything up. Before you start your first trade, you need to learn the fundamentals of how it works.
Visit Indira Securities to open a demat account instantly and start your trading journey with Central India’s leading share market brokerage firm.