How to open Demat and Trading Account

Well, as I said in the before posts, be ready with all the necessary documents to open Demat and Trading Accounts. There are Many Share Broking companies also called as Share Brokers available. Visit their websites and search for the nearest branch to your location and get their contact numbers. Call to 3 or 4 different Companies and ask for their Brokerage for Inraday and Delivery and other fees and charges. Compare all the companies and select one best from the four. Then take the application and fill it and submit along with all the necessary proofs. Wait for 15 days. Your Demat Account and Trading Account Details will be delivered to your Address with in 15 to 20 days.

Points to Remember When you Open Demat and Trading Accounts

Documents Accepted as a Identity Proof

Here I am giving you the list of proofs that are accepted by most of the Share Broking companies as a valid Identity Proof for opening Normal Demat Account (or) for opening NRI(Non Resident indian) Demat Account. If you submit any of the following that is enough.

Valid Proofs are as given bellow
1) Photocopy of your PAN Card- In general PAN Card is mandatory to open Demat Account. In most ways submitting PAN Card is alone enough for Tax proof and also for Identity proof. But some times PAN Card will not be accepted as a Identity proof only if your photo on the PAN Card is not clear. So if you feel that your photo is not clear and also got other valid Identity Proof, then submit that in order to avoid the cancellation of your application. Mostly it doesn't happen, but why not to have some added security for your application when you have the option?
2) Photocopy of your Voter Identity Card
3) Photocopy of Passport
4) Photocopy of Driving license
5) Photocopy of Learning license
6) Photo Copy of your family Ration Card with your photo on it. ( Some Broking Companies may not accept Ration Card for Identity Proof. Please call to your selected Broking Company and confirm

How to open Demat and Trading accounts

Documents Accepted as a Address Proof

Here I am giving you the list of proofs that are accepted as a valid address proof by many of the Share broking Companies for opening Demat Account. If you are a NRI(Non Resident Indian) and wants to open NRI Demat and Trading Account you can use these proofs to submit to your broking company as a Indian address proof.
The bellow documents will be accepted as a address proof. you can use any one of the listed Document for your address proof need.

1. Photocopy of Passport
2. Photocopy of Voter Id
3. Photocopy of Driving License
4. Photocopy of Ration Card
   
5. Photocopy of Telephone Bill on your name.
6. Photocopy of Gas Bill on your name.
7. Latest Electricity Bill on your name.
8. Photocopy of Bank Pass Book with your nabe and address on it
   
9. Bank Statement.
10. lease agreement
    

*Some of the above listed (Ration Card, Gas Bill,and Lease agreement) are not accepted by some brokers. please call your Share Broking Company and confirm.

Documents Accepted as a Identity Proof

Documents and proofs needed to open Demat and Trading Accounts:

Before Opening Demat Account and Trading Account you should be ready with some Important documents ready. they are as listed bellow. If you are not ready with all those necessary documents start applying now. Here are are the Necessary documents.

1) Savings Account with any one bank.
2) One Self Cheque leaf of the same account where you hold the Bank account. This cheque should be of MICR(Magnetic Ink Character Recognition) cheque. Share Brokers do not accept Micro cheques(local cheques or same city cheques).
3) Photo copy of your Address Proof.
4) Photo Copy of Identity Proof.

5) Photocopy of yor Pan Card. If you dont have apply for PAN card now. It will take 15 to 20 days to get delivered yor PAN Card at the given address.
6) 2 to 5 color photos. (Requirement varies from each broker so call to your broker and ask him how many photos they need)

For more Information Click on Bellow links.
1) Documents accepted as a address proof.
2) Documents accepted as a Identity Proof.

Buy Shares by Your Self

If you want to Buy Shares by your own from your Home you must need An Internet Connection. This Type of option is better if you want to do Intraday Trading.(Buying and Selling on same day)

Minimum requirements needed to buy shares by your self is as given bellow.
---> 1 Personal Computer
---> Internet Connection
---> Bank Account with Net Banking Facility
---> Demat Account
---> Trading Account

* Here when you suppose to buy or sell shares by your self you should get permission from your Broker for Online Trading. Some brokers give you this facility by default some brokers will not. So before Choosing your broker compare particular broker’s services with others and choose.
* Some Brokers provide you Software by charging some fee of Rs 650 or 700. Which is really helpful to monitor the scrips.

Documents required to open Demat and Trading Accounts

Buy Shares with the help of Broker

Buying or selling shares with the help of broker is either by walking to your broker’s office or by calling to Your Broker’s Customer care number. Al the Brokers will maintain some systems with Internet connections for the convenience and use of their customers. Those systems will be maintained by the Relationship officer. You can walk to your nearest office at any time and watch the market and place the order for buying and selling shares. If you don’t find the time to walk to Your Broker’s Branch, then you can place a call to your Broker’s Customer Care Number and place your order for buying or selling particular company shares. With the help of Customer care no you can know the current Value of shares and your value of shares and your available funds, your available shares, your outstanding orders e.t.c. Some Brokers offer you this facility with free of charge but some charge you some amount on the basis of your orders. So before Choosing your broker compare particular broker’s services with others and choose. The minimum requirements you have to have with you to buy shares at your broker’s office is as given bellow.

1) Bank Account with Net Banking Facility
2) Demat Account
3) Trading Account

Buying Shares by Your Self

What all I should have to buy shares

Things you need to have to buy shares:

There are two ways to buy shares. you can very well use both the options to buy shares Depending on your capability and convenience. These facilities help the people to start the business with very less investment. This business not only reduces the Investment and also suits for different time frames. Those who works in companies and who are busy in other work can also be able to do this business. These Two options In this business allow people to buy shares when they are at home, Office, While Traveling, and also even while watching movie. Isn't it a good convenient way to do the business very easily? Good! Now come to the options available to buy shares. as i said earlier there are two ways to buy shares and are listed bellow. on those Links to get more Information about particular Option.

1) Buy Shares with the Help of Broker.

2) Buy shares By your self.

What is a Trading Account

Trading Account is given to the Investor while registering with broker or sub broker. Trading Account is provided with a Trading ID which is to be used for all the transactions later on. The term Trading in the sense Buying and Selling. Here This Trading account is used to buy and sell the shares. For buying the shares we need to deposit money in to trading account. After that we can use this money to buy shares. And the same account is used to sell the shares. When shares sold money will automatically be credited to the Trading Account. Okay now it is known that if we deposit money in Trading account it is easy to buy shares, but how to deposit money in Trading Account? It is very simple. There are two options available to transfer money from our Bank account to Trading account. We can give cheque to the Broker. Later after clearing that cheque he will deposit that money in to Trading Account. And the second option is to transfer money directly from our Bank Account to Trading Account through Net Transfer option. And it should have a Gate Payment Facility with your broker. Net Transfer is very fast which just take few seconds to credit your money to the Trading Account. Net transfer facility is now available with all the banks. But please Verify with your broker whether your broker has been registered for the Gate Payment with your Bank or not. Detailed Information about Selecting the best Bank will be given later in the Best Bank Section.

What all I should have to buy shares

What is A Demat Account

Demat Account is given to the Investor while registering with broker or sub broker. Demat Account is provided with an Account number. This Account would be used for all the transactions later on. Demat Account is used to keep the shares safe which we bought in the Exchange (BSE or NSE). In earlier days before the commencement of Demat Account investors were given relevant Documents for the shares they bought. And those documents (or) materials had to be kept safe with so much care. These documents had to be given to the buyer when selling. There was a problem of misusing these documents. During those days people were finding ways to change the name on the documents and selling those shares without knowing to the actual owner of particular shares. During those days cheaters were playing role. So SEBI planned to use Demat Account in order to prevent the misusing of share Documents. This Demat account is very secure than Documents. In this way all the shares will be stored in the Demat Account in electronic form. These electronic shares will be secured by Internet password and transaction password. Shares cant be transferred to third person with out entering these passwords. Now no one can sell or transfer the shares with out the knowledge of a share holder. When we buy shares, they will be added to the Demat Account Automatically. When we sell, shares will automatically be transfered from your Demat Account to Buyer’s demat account.

What is a Trading Account

Where To Buy Shares

Well, we understood what is a share, But where to buy shares from? Do we need to go to company directly to buy shares from particular company? No, that is not the process. There is an organization which controls all the functions and actions of the shares and is called as SEBI (SECURITIES AND EXCHANGE BOARD OF INDIA). SEBI protects the interests of investors in securities and promotes the development of the securities market through appropriate regulation. Under the SEBI control there are two main exchanges are there in which all the transactions and exchanges of shares occur. They are BSE (Bombay Stock Exchange) and NSE(National Stock Exchange). Owners of the company who wants to offer shares to the public at the initial will put an application to the SEBI. Then SEBI go through the company prospectus and past history of the company and sales and product details of that company and gives permission to offer shares to the public. The process of offering shares to the public initially is called IPO(Initial Public offer). And is also called as a primary market. Then after getting permission from SEBI the company will give advertisement to book shares at the primary market at a particular price.

Now people who want to buy particular company shares in primary market can rush to the banks and send application along with cheque to buy. Then after receiving all the applications company will allot shares to the applicants depends on the subscribing ratio. Then after allotting shares company will list it’s shares in BSE and NSE. Most probably the listing price will be greater than that of issue price in IPO. Now peoples who got shares in the primary market can sell their shares after listing in BSE and NSE if the share price increases. Later he can buy shares again in these exchanges if the value of shares reduces. This is called secondary market

We can’t even buy shares directly from BSE and NSE in secondary market. There are some registered brokers with the SEBI who are given license to take care of all the transactions done for shares. These brokers are called Share brokers or partners of SEBI. There will be sub-brokers who gets permission from main brokers or partners of SEBI who are allowed to do all the transactions wit the exchanges like BSE and NSE.

So one who wants to buy shares and sell shares should register with a Broker or Sub Broker. Then he can buy and sell any company shares through broker.

One who wants to invest in share market is called an Investor. When Investor is registered with the Broker Or Sub Broker he will be given a Demat Account and Trading Account. He can use those accounts for all his transactions.

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