Want to open a Demat & Trading Account? Here’s what you need to know to do so!
By the end of this article, you’ll get the proper idea of how to proceed for the same.
First of all, you need to understand that a Demat account & a Trading account aren’t the same.
A Demat account (Dematerialised Account) is just like your savings bank account. The difference is just that instead of money, the shares you bought are kept in a Demat account. So, when you buy or sell any shares, they’re credited or debited from your Demat account.
On the other hand, a Trading account acts as a link between your Demat account and Bank account. It’s a medium to trade shares in the market via the broker you hired.
Now, one of the most frequent queries is that “Do you need a broker for investing in shares?” The answer is yes! You do require a broker to trade shares in India who is authorized by SEBI (Securities and Exchange Board of India). You can’t just run into the share market and start trading right away. There are procedures involved for transferring and settling the shares, which only an authorized broker can take you through.
HDFC Securities, Kotak Securities, ICICI Direct, etc. are some of the big banking corporations (Full-Service Brokers) while Zerodha, 5paisa, Upstox, Fyers, etc. are growing startups (Discount Brokers) are all examples of brokers in India.
So, you’ve got an idea about the brokers you can hire for trading. Now let’s move forward to the main concern- Where to open a Demat & Trading account?
You can open these accounts with Full-service brokers as well as Discount brokers. But it totally depends on the services you want to choose one of them.
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If you don’t have any issue with paying some extra bucks and want multiple services like shares, mutual funds, stocks, fixed deposits, etc., then you must open the accounts with Full-service brokers.
On the other hand, if you wish to invest only in stocks and shares, it would be much more affordable if you open the accounts with Discount brokers. If you’re a newbie, investing with Discount brokers can save you a lot of money because of the low brokerage charge.
Also, you might not get personalized attention in the case of big banking corporates but it is not so in the case of the growing startups if you need expert advisory services for trading.
How to open a Demat and trading account?
It’s a very simple, hassle-free online process to open a Demat and trading account nowadays. All you need are soft copies of the following documents:
With all these documents available, you just need to go to the website of the broker of your choice and create an account online.
You can also open multiple accounts if you wish to work with more than one broker. But you need to pay the AMC (Annual Maintainance Charges) for all your active accounts. It is usually between Rs. 300-700 annually for two active accounts.
In today’s modern world, creating a Demat & Trading account is just a few clicks away. You just need to decide with which broker you want to go ahead with within your trading journey.