The share market is the area that offers you the investment opportunity and helps you to make money. If you are looking forward to how to earn money in share market, then get started with the share market account.
It opens a gateway for you to plan your investment in shares, bonds, ETFs, mutual funds, or IPOs.
Wondering what a share market account is and how to open it?
Here is the complete guide for you that helps you in making your way towards share market investment.
So, without any further delay let’s get started!
Share Market Account for Beginners
For a beginner, the stock market is always complex, but once you understand its structure and gain an understanding of how stock market works, you would be able to make the most out of it.
Also, one often remains confused as to why they need an account in the share market. Well! The answer is simple, to make it easier to trade across segments and to secure their holdings.
Now to trade and keep the holdings there are different accounts, which are discussed later in the article later.
Before you plan your investment, it is important to consider few important aspects like:
- Minimum amount to invest in share market in India.
- Type of trade you want to pick
- Gaining basic knowledge of the stock market investment
- Duration for which you want to hold shares.
- Whether you want to invest or trade in a specific segment or open for all kinds of investment opportunities the market brings in for you.
Once you make up the list of basic things required for share market investment, next comes the types of accounts available for the investors.
Let’s talk about it in detail here.
Share Market Account Types
When talking about the types of accounts in the share market, there are broadly categorized in two types:
- Trading Account
- Demat Account
Further, the trading account is divided into six different types, depending upon the trading segment you choose.
- Equity Trading Account
- Commodity Trading Account
- Currency Trading Account
- Derivatives Trading Account
- 3 in 1 trading account
- 2 in 1 trading account
Further, the demat account is divided into three types:
- Regular Demat Account
- Repatriable Demat Account
- Non-Repatriable Demat Account
Let’s a detailed overview of all these types in the segment below:
Starting with the understanding of demat account, it is the type of account in share market where one can store the holdings.
In simple terms, it is a dematerialized account where one can secure their holdings in electronic form.
Now, this demat account is provided to you by the depository participant but it is being managed and operated by the depositories of India (NSDL and CDSL).
Choice is the full-service stockbroker that offers you the facility to open a demat account registered with both CDSL and NSDL.
As discussed above, there are three different demat account types:
Regular Demat Account
It is a demat account available for the citizens of India. Anyone, who is looking forward to investing in equity, IPOs, ETFs, and bonds can have a regular demat account with the stockbroker.
Repatriable Demat Account
Next comes the repatriable demat account that is meant for the NRI. So, if you want to continue trading in the Indian market from another nation you can open a repatriable demat account with any of the reputed stockbrokers.
Here, however, one must have a NRE account (Non-Resident External) along with the demat account opening and further the NRO account (Non-Resident Ordinary) to link with the demat account and seamless flow of investment.
Non-Repatriable Demat Account
Last comes the non-repatriable demat account, which is again for the NRI. Here unlike the repatriable demat account one cannot transfer the funds abroad.
But as in the repatriable demat account, one has to link the NRO account with the demat account for seamless investment across segments.
Share Market Trading Account
After the demat account, there is the trading account. Wondering why a trading account is required in the share market?
Here, investing in the share market involves buying and selling of shares, the credit or debit of which is taken in the demat account.
But to buy and sell shares, all the transactions are taken from the trading account.
Thus demat account is to credit and debit securities while the trading account is to credit and debit the fund for investment.
Here again, trading account is of different types, the detail of which is provided below:
Equity Trading Account
The trading account that allows you to trade in the equity shares of the company comes under the Equity trading account.
So, whether you open an account to apply for IPO or to invest in the shares of the company listed in the stock market, you need to have a trading account.
Commodity Trading Account
Other than this there is a commodity trading account that gives you access to trade in different commodities.
For making money with commodity trade, it becomes important for you to choose the stockbroker registered with the commodity exchanges (MCX or NCDEX).
Currency Trading Account
Want to earn money in the stock market by trading in currencies of different countries. Share market opens a gate for that as well. Trade-in Forex by opening a currency trading account with the stockbroker.
This allows you to trade in four different foreign currencies, Euro, USD, Japanese Yen, British Pound Sterling, and earn benefits with the fluctuation in these currencies.
Derivatives Trading Account
Futures and options is the trading segment that allows you to hedge your investment risk. You can trade futures and options in either of the trading segments discussed above.
However, to activate the trading account in derivatives, you need to submit a few additional documents like a salary slips or account statements for income proof.
3 in 1 Trading Account
The above accounts are as per the trading segment you choose. Further, you can have 3 in 1 account, where you can link your trading account, demat account, and bank account.
This streamlines the process of fund transfer to and from your trading and bank account and makes it easier for you to operate the demat account.
2 in 1 Trading Account
Apart from 3 in 1 account, there is 2 in 1 account, provided by most of the stockbrokers. This involves linking your demat and trading account together for seamless operation and trade in the stock market.
You can open a 2 in 1 account with the renowned full-service stockbroker, Choice by following the simple steps discussed below.
Share Market Account Open
After discussing different types of demat and trading accounts, let’s now have a quick look at the process involved in opening a share market account.
To open a share market account, the foremost step is to choose a stockbroker.
For choosing a broker, check for the brokerage charges, the type of trading app provided by the broker, research tips, etc.
Apart from this check for the account opening process. Although most stockbrokers these days provide an online way to open a demat account, it is good to choose the broker offering both online and offline mediums to activate the demat account.
Other than this there are account opening charges and the maintenance cost for the same.
Opening a share market account with Choice provides you the benefit of free account opening online.
Now to open any kind of account you need to submit a few essential documents to validate the information. In case of a demat account, here again you have to upload a few documents.
- Identity Proof
- Aadhar Card
- PAN Card
- Voter ID Card
- Driving License
- Address Proof
- Aadhar Card
- Voter ID Card
- Utility Bill
- Ration Card
- Bank Details
- Canceled Cheque
- Income Proof
- Salary Slip or Account Statement of last 6 months
- ITR Acknowledgement Slip
- Passport Size Photograph
How to Open Share Market Account Online?
Let’s now discuss how to open a share market account online. Since the whole process is online, you need to check for the internet connection.
Here to make your journey easier, here is the 2 in 1 account opening process of Choice.
- Open Choice website and click on the link ‘Open Demat Account’.
- Enter the basic details and get your mobile number verified with OTP.
- Next enter more details, like Name, Income, Occupation, etc.
- Post this, upload the documents like PAN Card, Aadhar card, Bank Passbook, etc.
- Once done, now verify the Aadhar details with the NSDL e-sign process where you need to enter the Aadhar number and OTP received on the registered mobile number.
- The last step is the In-Person Verification, which is too online. Just share the short video of a few seconds to verify yourself in person.
Share Market Account Charges
After the account opening process, let’s check different charges associated with opening and maintaining a demat account.
These charges are fixed by depositories (CDSL and NSDL), however, the stockbrokers are free to offer the services at their specific plans.
Various charges involved with the share market account are:
- Share market account opening charges
- Demat Account AMC charges.
Share Market Account Opening Charges
In general, the account opening fees vary somewhere between ₹0-₹900 in some bank-based stockbrokers.
Choice, although a full-service stockbroker provides services at no cost where it offers a demat account along with trading account i.e. 2 in 1 account for FREE.
Other than the account opening fees there are the annual charges or account maintenance charges that are for maintaining the account operations and for securing the holdings in the account.
Here, no AMC is charged if you just open a trading account with the stockbroker.
Again, Choice comes with the plan and offer, where it charges the minimal AMC of ₹200 but waives it for the first year. Thus the investor need not to pay any fees while opening an account with the broker.
Share Market Account App
Next is the app for the share market, as you open an account with any of the stockbrokers, you are provided with the trading app that you can use to do trade across segments.
To access this app, you are provided with login credentials, USER ID, and PASSWORD.
Here one must consider the following points to consider the reliability of the application:
Other than this, the app must provide you with the:
- Real-time market updates
- Offer you the list of top performers and looser
- Have interactive and multiple chart options.
- Have technical indicators for technical analysis for intraday trading.
- Should provide research reports and other information of the company useful for investment.
With all the advanced features mentioned above, Choice provides the Jiffy app for its mobile and web users.
The app has multiple benefits with Mojo analysis features that make it simpler for you to pick stocks and invest using the different order types.
How to Close Share Market Account?
As mentioned above, there are specific account maintenance charges associated with the demat account. Now most of the time, investors stop using the demat account, other times they just want to have multiple demat accounts.
In that case, it becomes essential for you to close the accounts that are not active or you are not using them actively. This is just to prevent you from the additional fees and maintenance costs.
Most of the stockbrokers provide\ only an offline way to close the demat account or share market account. However, you can download the form online, fill in the details and send it to the nearest branch of the stockbroker or to the headquarters via courier.
Before you close the account with any of the stockbroker, make sure you:
- Clear all the pending dues with the stockbroker.
- Transfer or sell off the demat account shares before closing the account.
So here is the complete detail of the share market account. Choose the stockbroker wisely by considering various factors and further the segment in which you want to trade.
The right and reliable stockbroker like Choice can actually help in making your share market investment journey smooth and simpler.
So what are you waiting for! Open a demat account now.