It is always recommended to invest in growing economies. As of now, India is one of the best hotspot for investment. It has enormous opportunities for investment in various segments and entire world is eying on it. Recent pandemic forced everyone to think of investment to cope with such uncertain situations financially. If you would like to invest your money in Indian economy but don't know where to start and how to open share market account in India then this post is written for you.
Confused? How to start trading in Indian stock market. I, too, was confused at the time of opening demat account. I didn't know where to go and from where to start. Keeping that in mind, I am writing this post. This post will answer your questions and will help you open share market account with one of the best stock brokers (which is crucially important).
In this post, you will learn:
- How to open share market account in India
- What are the different types of stock brokers available in India to open trading account
- Best stock brokers to open share market account
- What are the documents required to open Demat account
- Charges
How to open share market account in India?
To invest in India stock market, you will be required to have a demat account, trading account and bank saving account.
In this day and age, all of us have bank saving account. If you too already have bank saving account with any of Indian bank then congratulations you are fulfilling first requirement.
Now to open demat account and trading account, you will be required to choose an Indian stock market broker. For your information, you cannot directly invest in shares, first you will be required to open a trading account with a stock broker.
Let's first understand what are these account meant for:
- Bank saving account: At the time of opening demat account, you will be required to link your bank saving account to it. And with demat account, your stock broker (whichever you will choose) open a trading account for you.
- Demat account: You will require demat account to hold your bought shares and trading account to hold your cash or funds. To make share market transactions quick trading account had been introduced. It makes share trading quick.
- Trading account: In this trading account, you will add money using your linked bank account and when you will buy shares then equivalent amount will be deducted from your trading account. Similarly, when you will sell your bought shares then amount which you will get from selling your bought shares will be credited to your trading account, not bank saving account. Once the amount is credited to your trading account, you will be free to transfer it to your bank account.
For you knowledge, with your demat account, your trading account will be opened. You don't need to open it separately.
In my recent post, I showed you best stock brokers in India with whom you can open your demat account.
After opening your trading account, you are good to go.
You can watch following video to know step-by-step share market account opening process:
Share market account opening process is very easy and it only takes 15-20 minutes. You don't need to visit any office, it is completely online. Just make sure you open your share market account with a renowned stock broker who offers you one of the best trading platforms.
What are the different types of stock brokers available in India to open trading account?
Stock brokers in India can be categorized under two categories: Full Service and Discount Stock Brokers. As the name suggests, full service brokers provide cutting edge trading facilities and in return they charge more brokerage and account maintenance charges.
On the other hand, discount stock brokers try provide trading facilities with lowest possible charges. Yes, you compromise little but in return you save decent money by paying less brokerage.
As of now, everyone including professional traders go with discount stock brokers because renowned stock brokers like Zerodha offer trading facilities almost equal to full service brokers. Observing this many renowned full service stock market brokers are going to shift from full to discount category.
If you're a retail trader and your investment portfolio is going to be below 10lacs then you are advised to open share market account with a discount stock broker because he will help you invest and trade with minimum possible brokerage.
In initial trading journey, all traders trade with small quantities therefore it is important to pay less brokerage to earn more profit. For your information, to complete one trade, which includes buying and selling, you will need to pay ₹40 brokerage to a discount broker whereas for the same trade full service broker would charge more than ₹100.
So, you need to think of it. Stock brokers I have mentioned above belong to discount category and believe me they are one of the best stock brokers out there with advanced trading tools and indicators.
If you can afford charges of full service brokers then there is no doubt you should go with them.
I personally advise you open your account with a discount category brokers.
What are the best stock brokers to open share market account?
As I mentioned above, in my opinion, you should open your demat account with a discount stock broker. For detailed information on read how to choose a best share market broker.
Here are my recommendations to open share market account in India: (Click on the blue text link to open your account now)
- Zerodha: No. 1 discount stock broker in India (Recommended)
- Angel One: Especially recommended for trading from mobile.
- Dhan
Zerodha: With more than 7.5 million clients and over 15 percent retail traders trading volume, this trading platform becomes India's best trading platform. They have very advanced, fast and user friendly trading platform. You can watch this detailed review to know everything about Zerodha trading platform.
Angel One: They are the one of few stock brokers who offered affordable trading opportunities to retail traders. Now they are very aggressively upgrading their trading platform to take it to the next level. If you're going to trade using your mobile phone then this platform is very much recommended because their mobile trading platform is very much advanced and quick. Click to read their account opening process.
Dhan: It's also growing very rapidly and many retail traders are using it due to its advanced trading tools. The platform is really advanced. You can certainly think of it.
What are the documents required to open demat account?
You should have following documents and if you would like to open share market account in India:
- PAN Card
- Aadhaar Card. also make sure your Aadhaar is linked it your mobile number. Your mobile number must be mapped to your Aadhaar. If not linked then first you will need to link it to your Aadhaar.
- Income proof: Bank account statement with closing balance more than ₹10000 is accepted as an income proof. Alternately, you can upload your salary slip or income tax returns slip.
You just need above three easily available documents to open share market account. Again, account opening process only takes 15-20 minutes and within 24-48 hours you will get your login credentials to start trading.
Charges
You will be required to pay around ₹300 account maintenance charges annually. Just like banks, stock brokers collect account maintenance charges.
Apart from that for trading flat ₹20 brokerage per executed order excluding taxes and stamp duty charges will be charged for intraday trading. For delivery trading, you will not need to pay any brokerage, it means delivery trading is free (in case of discount stock broker). Don't afraid taxes and government charges are not too much averagely you would pay ₹20 rupees as government charges to complete one trade.
If you are still confused how much you would pay for trading then let's understand it with an intraday trading example: (Note: This example is for just reference actual charges may vary slightly.)
Let's say in Intraday, you have bought 100 shares of State Bank of India and in the end of the day you sold it. Here are the approximate charges you would have paid:
| Buy/Sell | Brokerage Paid | Government Charges Approx. |
|---|---|---|
| Buy 100 shares | ₹20 | ₹10 (Including all charges like stamp duty, taxes and the like) |
| Sell 100 Shares | ₹20 | ₹10 |
| Total | ₹40 | ₹20 |
So to complete one trade, you would need to pay around ₹60 including government taxes and charges.
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