How to Open Trading Account

When you open a trading account online, you will be able to invest in the stock market with the help of a reputable stockbroker by following their strategies. Besides, the online trading platform will allow you to diversify your portfolio, resulting in lower risk.

To get the benefits of a trading account, choose a genuine and reputable company with an excellent track record of providing a seamless trading system, along with profitable investment strategies.

What is a Trading Account?

A trading account meaning is that it is an account for buying and selling shares on the stock exchange. Generally, a trading account refers to a trader’s primary account.

A trading account connects your bank and Demat account. You can open this account with a stockbroker.

When you purchase shares, the first thing you need to do is transfer the value of those shares from your bank account to the trading account. Once the amount gets credited, the transaction is initiated. Similarly, if you sell a certain number of shares, the transaction amount will be credited to the trading account.

How to Open Trading Account Online

Since 2000, the stock markets have shifted to the digital platform. It means, stock trading happens online these days. To invest and trade in the stock market, you would need a trading account and a Demat account. You can open a trading account with a stockbroker.

Digital modes of transactions are faster, secure, and more cost-efficient. If we trace the digital revolution in the financial sector of India, our search might lead to the capital markets. The stock market witnessed a paradigm shift from physical trading to the electronic platform in 1996. The rolling out of the Depositories Act 1996 resulted in the dematerialisation of shares.

Often, brokerage firms have thousands of clients. It is impossible to receive all physical orders on time. Therefore, to facilitate this process, we open a trading account. You can use this account to place buy or sell orders online or by phone, which will be automatically redirected to the exchange through a stockbroker.

Before physical certificates were converted to electronic form, the stock market operated as a system of public service. Traders communicated verbally and through gestures as they bought and sold stocks. With the advent of e-commerce, investors do not need to be on the stock exchange and can complete their trades with a simple online instruction. This is how you can open a trading account online.

• First, choose a stockbroker or company. Make sure the broker is a reputable one and you can get your order on time. Remember that timing is paramount in the stock market. Even a few minutes can change the market price of a stock. For this reason, you should choose a well-known broker.
  
• Compare brokerage fees. Each broker charges a specific fee to process your order. Some may charge more and some may charge less.
  
• Some offer discounts based on the number of transactions performed. Consider all of these before opening an account. However, you do not need to choose a broker with the lowest fees. Often, quality brokerage services offer higher-than-average fees.
  
• Then contact your brokerage firm or broker to inquire about the procedure for opening a trading account. Often, companies will send representatives home with an account opening form and a Know Your Customer (KYC) form. Please fill out these two forms. Send it along with two documents proving your identity and address.
  
• Your application will be verified by personal verification or over the phone and you will be asked to provide your data.
  
• After processing, the transaction account data is provided. You can now trade the stock market.

Process of Opening a Trading Account

The procedure of trading account opening is below:

• To open the best trading account in India, carry out detailed online research, or ask for recommendations to find a genuine brokerage firm. Consider the ones that offer to open a free Demat account with no annual charges. Also, check the interface of the trading platform and the value-added services it offers before making the final decision.
  
• After shortlisting a broking firm, keep in touch with them about the procedure of opening a trading account. The brokerage will let you know about filling out a form and a Know Your Customer (KYC) form. Subsequently, a representative from the brokerage firm will walk you through the process. Most brokerages offer a Demat plus trading account because a Demat account is compulsory to store the securities.
  
• Other than forms, you need to submit your identity proof, address proof, and on some occasions, your proof of income. Besides the copy of the Aadhaar card or passport as the proof of address, you need to submit a copy of the PAN card since it is mandatory to open a trading account.
  
• After submitting the documents, the brokerage firm will carry out KYC verification.
  
• You can choose the e-KYC process. For this process, you need to link your PAN card to the Aadhaar card and your bank account. The mobile number you have mentioned in the account opening form should be the same as the Aadhaar card to complete the e-KYC process.
  
• Typically it takes around 3-4 days to activate a trading account after completing the verification process.

Most brokerage firms in India charge a certain amount to investors as trading account opening fees. However, some reputable broking firms also offer a free trading account with zero annual trading account charges.

Remember that you also need to open a Demat account, which is different from a trading account. A Demat account is required to hold your shares, bonds, mutual funds, ETFs, and other securities. Your trading account should be linked to your Demat account to trade.

Documents Required to Open Trading Account

Identify Proof: You need to submit an identity proof of yours. You can submit any of the documents below as your identity proof:

• Aadhaar Card
• Passport
• Voter ID card
• PAN card
• Driving license
• Any identity card issued by the Central or State government.

Permanent and Correspondence Address: If your permanent and correspondence addresses are the same, you need to submit only one of the documents below:

• Aadhaar Card
• Passport
• Voter ID card
• Ration card
• State-issued driving license
• Bank account statement or bank passbook
• Electricity bill or gas bill

Income Proof: Trading in the Futures & Options (F&O) segments needs you to submit your income proof. You can submit any of the documents below:

• A copy of your Income Tax Return (ITR) to be submitted to the Department of Income Tax;
  
• A copy of your audited annual income by a chartered accountant;
  
• Bank account statements for the last 6 months
  
• The statement of your Demat account holding with a depository participant.
  
• If you were a salaried employee, you need to submit your salary slips and a copy of Form 16.
  
• Net Worth certificate.

Corresponding Bank Account Proof: You need to make sure your bank account is valid and working properly. You may submit any one of the two documents below for verification.

A canceled cheque from the bank that you want to link your trading account to. The canceled cheque should have your name printed.

A copy of the bank passbook of the relevant bank with the IFSC Code.

At this point, you may already have become familiar with the documents you need to submit to complete the process of starting work with your trading account. If the originals of these documents cannot be provided for verification, the documents must be certified by a notary public or a Gazetted Officer.

Time Required to Open Trading Account

If all your required documents are perfect and the KYC is completed, then the trading account can be opened in 15 minutes. If the KYC is incomplete, it takes around 3 business days for your account to get approved.

If there is any mismatch between the documents you have submitted and the documents required, there could be some delay.

Subsequently, you can fund your account from your bank in India. Once your funds are received, you can begin investing in stocks, ETFs, and custom portfolios.

Benefits of a Trading Account

Single Point of Access: If you choose to open a trading account with a leading brokerage firm, you will be able to access all stock exchanges in India through a single point of access. You will have access to prominent stock exchanges such as are the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and others.

Hassle-free Transactions: The digital trading platform will enable you to trade seamlessly. The entire process of fund and share transfer shares happens smoothly. You can trade and save easily using a secure online trading platform.

Flexibility: Access your online trading account anytime, and from any location. A browser and app-based trading platform will enable you to access your trading accounts from desktop PCs, laptops, smartphones, tablets, and other digital devices.

Get Reliable Research Data: To succeed in stocks and other investments, access to trusted research reports from seasoned experts makes it easy to make informed trading decisions. This can drastically increase your chances of increasing your return on investment.

Personalization and Notifications: If you encounter any technical issues with your trading account, you will get personalized support from trained representatives. You can also set personal alerts via message or email so you don’t miss out on profitable deals.

Multiple Media: Trading through your online account will streamline the whole process. Various methods of accessing your account will enable you to trade during market hours and after-market hours if necessary.

How to Open a Best Trading Account

Before you venture into the dynamic stock market to begin your financial journey, it is important to have an unbiased view of the factors and support that will work in your favour.

For example, a brokerage firm like Choice has been assisting customers through its 48 local offices across India for more than 25 years.

After opening a trading account, certified professionals from the brokerage firm can help you create a long-term investment plan.

You can open a best trading account with Choice for the following reasons:

Low Brokerage Charges: There will be incredibly low brokerage charges, which are as low as 2 paise!

Trading Over Call Facility for Free: You can opt to implement your trades over the phone, which is free of cost.

Opportunity to Earn More through Referrals: Choice has an attractive referral program that can generate a steady income for you throughout your life.

Additionally, you will get excellent research & advisory service where a professional research team provides you with technical/fundamental research data at no extra cost.

Also, you will get constant support from the customer care team that will guide you and walk you through all the required steps over the phone and emails.

Uses of a Trading Account

Trading accounts are not limited to stocks. There are trading accounts for currencies, commodities, bonds, gold, and exchange funds. Online merchant accounts have several advantages. The biggest advantage is that you can open a trading account online and you don’t have to visit a bank or broker’s office. Trading accounts provide one-point access, unlike real trading.

A single trading account provides access to stock exchanges such as BSE and National Stock Exchange and commodity exchanges such as National Commodity and Derivatives Exchange and Multi-Commodity Exchange. Open your online trading account to trade in multiple environments. A trading account allows you to trade from your mobile, desktop, or mobile phone.

Although a trading account is mainly for trading and managing stocks, there are also various other uses of a trading account:

1. Advantage of Trading in Various Indian Stock Exchanges

By using a digital trading account, there is no need for you to appear on the trading floor of a stock exchange in person. Instead, you can have easy online access to various stock exchanges across the country from anywhere in the world. Your trading account will enable you to deposit and withdraw funds through your account, place orders and track trades using a single platform.

2. Easy Access to Detailed Research Data and Market Updates

An online trading account will allow you to keep up to date with the latest business news as they become available. You will also have access to financial and research reports from leading companies to help you evaluate financial performance and anticipated future trends.

You can use this information to determine whether to invest in certain stocks that will help in achieving your long-term financial goals.

3. You can decide whether to have a cash account or margin loan account

Most companies offer at least two types of accounts: cash accounts and margin loan accounts (commonly referred to as “margin accounts”). In a cash account, you must pay the full amount for the security at the time of purchase.

For a margin loan account, you will eventually have to pay the security in full, but at the time of purchase you can borrow money from a brokerage firm, and the securities in your portfolio serve as collateral for the loan. This is referred to as “margin” to purchase securities. The difference between the purchase price and the investment amount is the amount the company borrows, which incurs interest charges, just like any other loan.

4. You can figure out the way to manage your uninvested cash

Occasionally there can be uninvested cash in your account. For example, you may have just deposited money into your account or received a cash dividend or interest without instructions on how to deposit it.

Your company will usually automatically deposit or “clean” this money into a cash management program (commonly referred to as a “clean up” program).

Cash management programs offer a variety of benefits, including different interest rates and insurance coverage. Understand the different features of cash management programs offered by your company so you can make an informed decision when asked to choose one.

5. You can decide who will call the shots when making the final trading decisions

Unless you give the “discretionary authority” in writing to another person, like a financial professional, you will make the final decision on investment in your account.

This person with the given authority may invest your money without consulting you about the price, amount, or type of security, or when the trading will be done using your account.

Features of Trading Account

A trading account functions differently depending on the broker who opened the account with.

In general, there are two types of brokers — Traditional or full-service brokers and discount or budget brokers. Full-service brokers offer a wide range of additional services.

The trading account offers many benefits that make trading fast, easy and hassle-free.

By opening an online trading account, you will get the following features:

Simplified Investment: You will be able to access financial securities on any stock exchange available under SEBI. Trading accounts create an integrated trading platform and provide trading flexibility.

Integration of Advanced Tools: An online trading account with a reputable stock broking firm will get you access to innovative, investor-centric, intelligent tools for making informed investment decisions. These advanced tools include strategy builders, investment advisory services, daily reports, and charts with detailed breakdowns.

Customized Investment: An inclusive trading account will enable you to personalize your investment experience at the right time. Whether you want to customize your stock tracking list or create custom charts to get an idea of the price swings in the market, you can seamlessly manage your trading account to fit your lifestyle without any hassle.

24/7 Accessibility: An online trading account will allow you round-the-clock access to your account and trade on the go. You will always be able to check and control your investments directly from your laptop, PC, or smartphone.

Fast Transactions: A prominent feature of an online trading account is that as an investor, you can avoid time-consuming trading. Thanks to the digital platform, the fund transfer gets completed within a few hours and you will have instant access to your account. You can begin buying and selling stock soon after the funds are available.

Transparency: A trading account gives a detailed breakdown analysis of any additional charges that may apply to your investment process. This minimizes the risk of getting overcharged by the DP or bank and guarantees the highest level of transparency in every transaction performed.

Choice Trading Account Charges/Fees

Opening an online trading account with Choice is free.

The AMC charges are free in the first year. From the second year onwards, you can choose any of these plans:

• Rs.200/- + GST Yearly Plan
• Rs.1500/- + GST – AMC Covered for Lifetime
• Rs.3000/- Fully Refundable AMC (You will get a full refund if you close your trading account with Choice

Choice Trading Platform – About Choice FinX

FinX is an independent trading platform by Choice, which has been trader-focused, and facilitates a single-window and single-click trade for users without facing any time lag in the dynamic stock markets.

FinX provides the advantage of an E-KYC registration using Aadhaar and major stock exchanges such as NSE, BSE, MCX & NCDEX have audited it for security and compliance. The platform also provides price alerts and holding alerts.

With the help of FinX, you can open a free and paperless Trading & Demat account with no annual charges.

Key benefits you will get from FinX:

• Free Opening of Demat Account
• No need to deposit a minimum amount to open an account
• Get a gift voucher worth Rs. 1000 for suggesting a unique feature.

Also, by using our trading app on either Android or iOS platforms, you can keep a tab of your trading account.