Business Finance

Check This Out Before Opening Your Stock Trading Account

Stock market investment and trading by millions of investors can be performed through a digital account. Prior to dematerialization, trading in the stock market was executed through physical mode. In that method, only brokers had access to the stock market. Investors usually connected with these brokers to trade in the stock market. Due to dematerialization in India in 1996, now investors trade in the stock market with an electronic account that digitally keeps securities safe and ensures smooth investment and trading in stocks, bonds, and other securities. 

Prior to opening a digital trading account, one should have knowledge of multiple concepts regarding the online stock trading account. 

Who can open a stock trading account?

In India, every individual (except minor) has access to the stock market trading. To initiate the trading, every individual above 18 years can open an online trading account.  The individuals need to accomplish several requirements to activate the account. These requirements are related to identity, bank details, taxation, and income proofs. 

Does a stock trading account require for every stock trading activity?

Direct stock market trading demands an online trading account that facilitates digital access to the market, but those investors who want to invest in mutual funds schemes, don’t need a  stock training account. These investments in mutual funds can initiate through online payment portals of a bank account.

What are the basic necessities to open an account?

Various brokers in India offer online trading account opening services with multiple charges and processes. Every broker demands basic documents regarding income, identity, and other validation. Following documents are mandatory for every individual to activate an account:

  • For identity proof: Valid photograph, Voter card, License, Passport
  • For bank details: Account number, other bank details, PAN card
  • For income details: ITR statements, 6-month bank statements, annual income receipts

(If an investor doesn’t have any income source, he/she can employ only bank statements).

You would require these mentioned documents to open an account for online trading in the stock market.

Cost structure for account:

Apart from documentation requirements, the cost element is a prime necessity for a trading account that you would keep in mind before opening an account for trading online.

Following are the multiple costs and charges that usually charge by brokers:

  • Account opening cost:

Generally, brokers have two types such as discount brokers and full brokerage brokers. Full brokerage brokers offer trading account services with subscription fees and premiums while discount brokers offer account opening services at no cost.

  • Transaction cost:

Every stock market trading activity is charged by brokers. Transaction fees for different securities and orders vary from broker to broker. On average, you might have to pay Rs 300 per crore to Rs. 325 per crore for the equity intraday trading segment. 

How much time does the account take to activate?

Application to open an account and activation formalities occupy a gap. The brokers proceed with multiple processes to activate your account for stock market trading. The registration process in India usually takes 1-2 hours. After this process, A KYC team validates the documents that verify the account. It takes around 24 hours to activate the account.

 In short, it will take around 1 day to start trading online in the stock market. Some brokers have an advanced technological base that ensures the fastest activation of accounts. You can use the share market app for easy trading.

Conclusion:

Trading for the short term and long term in the stock market can be digitally executed through an online demat or trading account that you can open with numerous brokerage firms. The account with brokers provides you a direct way to trade in the stock market. You need to analyze various factors before opening an account that will assist in smooth stock market trading.

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