Trading in the stock market might seem complicated at first, but with a Demat account, it’s simpler than ever. This guide will walk you through everything you need to know to get started, from setting up your account to placing your first trade.
Step 1: Open a Bank Account
As it is mandatory to have PAN card for share trading, having a bank account is mandatory in share trading. Why? As all the trading transactions you are going to carry out will be done through this account. When considering the stock market trading, you will be required to deposit some amount of money from your bank to your trading account.
When you purchase shares, they’re credited to your Demat account within T+2 business days (transaction date + 2 days). Similarly, when you sell shares, the incomes are transferred to your trading or bank account within the same time frame. Having an active bank account ensures smooth and secure financial operations for your investments.
Open an account with Angel One– Click here
Step 2: Open a Demat and Trading Account
To start trading, you’ll need a Demat account to hold your shares and a trading account to make your buy and sell orders. Some easy ways through which you can open demat account are explained below where this process is easier.
- PAN and Aadhaar details
- Bank account information
- Some of the fundamental demographic information (income, employment status and so on).
- KYC (Know Your Customer) verification Via Digi locker or Other means
- Identity proof Income proof (if you want to trade in the futures and options sect).
All of this can be done online which will not be too much of a bother in the process.
Step 3: Fund Your Trading Account
Once you open your Demat account you need to link your bank account to your trading account. This step also makes it possible for you to fund your trading account effortlessly. In particular, brokers offer the convenience of account funding through UPI, debit/credit cards or Net Banking.
Most of these brokers also come with a margin facility by which you can trade with a higher value than the value of your account. For example, if you have ₹10,000 in your trading account and a leverage of 5x then you can actually buy ₹50000 worth of shares. However, this is a great tool to use, but should be done occasionally to not over-rely on it.
Step 4: Start Trading
Once you have your account set up and funded it is now possible for you to look for the stock market. Here’s how you can get started:
- Open your broker’s online trading platform or app.
- Search for stocks you want to buy.
- Analyze the stock’s performance using available tools and charts.
- Place a buy order for the desired quantity.
Your shares will reflect in the Demat account once the transaction has been done and within two business days at most.
Benefits of a Demat Account
- No more paperwork – go trading online with the simple click of a button.
- You can Track and manage your assets and investments when from home or at work or even when on a vacation.
- There is faster settlement of transactions – no more string trials for weeks.
- Remove paper-based charges for stamp duties as effective ways to expand costless trading.
- You can also use your holdings as securities in the preparation of the loans.
Open an account with Angel One– Click here
Tips to Maintain a Secure and Efficient Demat Account
- Check your statements on a regular basis. Cross-verify your broker’s contract notes with your Demat account statement to ensure accuracy.
- To avoid service delays, do not let your account balance fall below zero by maintaining a Positive Balance.
- To protect your investments, create strong passwords and enable two-factor authentication.
Conclusion
Trading in the stock market can be profitable. With a Demat account, you have the tools you need to streamline the process and maximise your assets. Follow the steps outlined above, select a reputable broker like angel one, and begin your trading experience with confidence. Happy trading!
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