What Is A Trading Account And How To Open One?
Last Updated: Nov -14-2019
Need help choosing a broker?
We can help you find the right broker and save upto 90% in brokerage fees.
In the past, the stock exchange market worked manually. Traders used loud verbal communications and hand signals while buying or selling stocks. Now the process of making decisions of buying or selling stocks has become more sophisticated and faster by the means of Trading Account.
A trading Account is used to buy or sell equity shares in the stock market. Now, traders don’t have to be physically present to place orders. Instead they can simply open a trading account and register with a stock market broker, who will pursue trading on their behalf. It’s that simple!
Trading account basically acts as an interface between the investor’s bank and Demat accounts. Which means, the shares purchased through the trading account are credited into the Demat account and the appropriate sum is debited from the bank account; similarly, once the shares are sold, the demat account is debited and bank account is credited. Investor authorizes the broker to take all decisions regarding buying or selling the shares and simply attain profits.
Below are some common features of the trading account.
- Investors can access best performers in various categories
- Investors can receive regular market updates, and free news alerts
- Investors can increase exposure to various shares using margin investing options
An ideal trading account must provide some services like:
- Research reports and recommendations by experts
- Customized investment solutions
- Professional financial advisors
- World class trading platforms
- Pan India presence
In addition to enjoying a comfortable trading experience from anyplace at any time, the investor can avail to the following advantages of having a Trading Account.
- A single Trading account can provide easy access to multiple exchanges available for trading like NSE, BSE, NCDEX, and MCX.
- Online trading platforms provide detailed trading reports that empower investors to take informed decisions while trading.
- Online trading offers round-the-clock support system wherein support executives are always available to assist the user.
- Trading platforms have become app-based, which means that wealth creation is just a few clicks away accessible from any Smartphone, laptop, or any other hand-held devices.
- Thanks to the advanced technology, investors are able to enjoy seamless transaction facility which makes equity trading more convenient.
- Order can be placed even during after-market hours making it suitable for the investor.
- High-speed online trading platforms enable faster and real-time trading, maximizing profits
Before you begin to think about opening a trading account, there are many more aspects you need to consider. For instance, your transaction frequency will help you choose the right broker who is cost effective and has affordable charges. Once you decide to have a trading account, the next step is to gather all the necessary documents required to open a trading account. The investor may be required to submit:
- Income Proof – As a document of proof of income, investor can submit any of the following documents.
> Income Tax Return (ITR) acknowledgement slip
> Certificate of net worth
> Photocopy of the annual statement of accounts
> Form 16
> Salary slip of the current month
> Latest bank account statement containing income history of last 6 months
> Document proving ownership of assets
- Identity Proof - As a document of proof of identity, investor can submit any of the following documents.
> PAN card
> Aadhaar card
> Driving license
> Voter ID
> Identity card having investor’s photo which is issued by Central or State Government.
- Address Proof - As a document of proof of address, investor can submit any of the following documents.
> Voter identity card
> Ration card
> Insurance copy
> Registered lease or sale agreement
> Bank passbook not more than 3 months old
> Telephone/Electricity/Gas bill not more than 3 months old
> Identity card containing address which is issued by Central or State Government
> Address proof given in the name of Spouse
Once you have all the necessary documents by your side, now is the name to do some research on selecting the best trading platform. The best trading platform for any investor is the one that provides most or all of the items from the below checklist.
- Cost effective and reasonable service charges.
- Complete and comprehensive solution provider.
- Fulfills long-term trading requirements.
- Advanced technology platforms for easy access.
- Reliable and efficient services.
- Trained customer service executives
For online trading, you need a Trading Account and a stock broker. An efficient stock broker can make your investing job easier and convenient. Once you have chosen the best trading platform, and have all the documents handy, opening a Trading Account is an easy task. Following are the steps to open a trading account.
- Select a broker with good reputation and one who functions in a timely manner.
- Every broker charges a brokerage fee. Hence, while selecting, ensure that you draw a comparison between potential brokers and chose the best one.
- On finding a suitable brokerage firm, enquire for the procedure to open an account. Also ask about any possible discounts.
- A representative from the brokerage firm will visit your place and assist you with the account opening formalities. You will have to fill up the account opening form, Know Your Client (KYC) form, and submit all the relevant documents.
- On submission, firm verifies your documents and details provided on the form. They may do so in-person or over the phone.
- Once the application is processed, you will receive the details of your trading account.
Once the trading account is opened, the investor can trade as per convenience, from any place at any time. There are so many online trading portals that are offering online trading facilities to the investors. There are different fees, facilities, and terms and conditions offered by broking firms, hence the service provider should be chosen carefully. With the detailed reports available, and the guidance of expert broker, investors can make informed decisions and gain profits.
In case you are looking to get started with stock market investments or looking to open account with any of the above listed stock brokers,let us assist you in taking the next steps ahead.
Enter basic details here and a callback will be arranged for you!