The stock market has gone electronic in a bid to keep up with the changing times. And so, now it is possible to buy and sell your stocks by trading accounts and exchanges electronically or through a phone call.
But before you dive into the world of stocks and shares, the first step that you will need to take is opening a trading and a Demat account. A trading account allows you to buy and sell shares and security exchanges within a matter of minutes and is managed by a brokerage firm.
A trading account can be specified as an account that simply enables you to buy or sell stocks and securities on the country’s stock market. The primary advantage of an online business account is the convenience, suitability, and ease of making payments. You can do business online from the comfort of your home or office, or even on the go. In addition, you don’t have to worry about security issues because all your transactions are encrypted and secure. Having an online trading account is a prerequisite for trading stocks in India. When you open a merchant account, you will receive a unique identifier that is required for each transaction.
How to proceed about opening a trading account?
Select a Brokerage Firm
To open a trading account, the first step is to find a brokerage firm. This is an important step, and you need to choose a firm that takes and processes your orders promptly and diligently.
Since trading, unlike investing, is a short-term game, the returns can shift from very high to very low within minutes or even seconds.
And hence, your orders to buy and sell must be handled swiftly and with precision.
Check for the brokerage charges of the firm
All brokerage firms charge a certain amount of processing fees on your orders. The rate of this charge varies from one firm to another. Some firms may offer a discount on a specific amount of order.
Compare the rates among a few top firms that you are considering before making a final decision. You need not always pick the cheapest option since high-quality brokerage services can sometimes cost above average, but they will ensure the maximum return on your investment as well.
Get in touch with the firm
Once you have finalized the firm that you want to go with, you may get in touch with them to enquire about the procedure to open a trading account.
You can do so either telephonically or in person. Most of the reputed firms would then assign a representative to you, who would then visit you with the account opening and KYC forms.
Fill and submit the forms and other documents
Fill in these forms and submit them with other documents that will serve as your identity and address proof.
The documents that can be used as proof are PAN card, Voter ID, Driving License, Passport, IT Returns, Electricity and Telephone bills, or photo ID cards issued by central or state governments, PSUs, or other authorized bodies.
Complete the verification process
Once your application is submitted, the firm will get in touch with you on the phone or in-person to verify the details that you have submitted in your application.
Once verified, the account will be created, and the details will be shared with you. You may need to visit the firm to get these details if your account was opened offline.
If it was opened online, you may log in to the brokerage firm’s official website with your credentials and check your account status.
A trading account is activated almost immediately after opening and you can start trading with it the same day.
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