Investing in the stock market is one of the most important financial decisions. It provides one access to multiple trading opportunities. It allows you to recoup great returns on your investment. However, in order to trade in the stock market, one of the fundamental steps is to open a trading account. It is imperative to open a trading account to trade in the stock market. An investor cannot buy or sell shares in the share market without a trading account.
Hence, it is significant to know how to open a trading account.
What is a trading account?
A trading account is also known as a Demat account. This account can be used for investing in different investment instruments such as securities, bonds, mutual funds etc. A trading account is a prominent interface between the stock market and an investor. One can use the trading account to buy or sell shares. The transactions that one executes in a trading account is carried forwarded to the stock market via trading account.
One can open a trading account with any stockbroker. A stockbroker is a registered member of the stock exchange. The company trades on the behalf of an investor. It charges a nominal transaction fee against its services. There are numerous stockbrokers and brokerage firms in the industry. It is advised to do comprehensive research and associate with a professional stockbroking company for long term peace of mind.
A trading account is loaded with lots of features. These features are designed to make trading an easy and hassle-free process for an investor. When deciding to open a trading account, it is important to study various features of a trading account to make an informed and wise decision.
Some Common Features of Trading Account Includes:
- Not limited to stocks: One of the most significant features of a trading account is its versatility. A trading account is not just limited to buying and selling shares. An investor can use the trading account to invest in commodities, bonds, gold, exchange-traded funds and much more.
- Simplified process: Trading account opening is not a tedious task. One can open a trading account in just a few steps. To open a trading account, all you need to do is just submit the personal identity details along with KYC updation.
- Access to multiple stock exchanges: An investor can use a single trading account to trade in multiple exchanges such as BSE, NSE and commodity exchanges. Thus, one does not require to maintain a record of multiple accounts for trading in different exchanges. A single account can solve multiple purposes.
- Trade via multiple mediums: The modernization and technological advancements have added more convenience to stock market trading. One can start investing in a trading account via various media such as desktop, mobile or even on call.
How to open a trading account?
The opening trading account opens up multiple opportunities for an investor.
Below mentioned is the step by step guide to opening a trading account:
- Choose a brokerage firm: One of the primary steps is to choose a brokerage firm. For an investor one must select a brokerage firm to open a trading account. One must conduct a thorough and consider various parameters such as the brokerage fees, trading platform interface and value-added service while selecting a brokerage firm.
- Learn the account opening procedure: After finalizing a brokerage firm, the next step is to know the exact process for opening a trading account. One must reach out to the representative from the brokerage firm to execute the process.
- Submit documents: To open a trading account one will have to submit some documents such as an Aadhar Card, PAN Card, photocopy of residence proof etc. PAN Card is mandatory to open a trading account.
- Verification: After submitting the documents, the brokerage firm will conduct a KYC verification. The representative of the firm may visit your house to verify the documents or conduct an online verification process.
- Activation: Usually, post the verification, the brokerage firm may take 3-4 days to activate your trading account.