So you just learned how to trade and now you want to open a trading account but dont know where to begin? Well, then you have come to the right place. In today’s post we are going to teach you how to open demat account in an easy manner. But before that, let us first tell you what a trading account is and how it works.
What is a trading account?
Quite similar to a bank account, demat accounts are used to keep various securities purchased by investors. It is like an interface kept between the investor and demat account. And how it works is quite simple. All you need to do is place orders via the trading account after which you need to request for it to sell/buy to stock exchanges. Once that is done, all your securities will be submitted within the demat account, and the needed amount will be deducted from your bank account.
Know what kind of an account you want
Are you looking for a standard account that’s well-suited for short-term purposes or a long-term investing goal is what you are looking at? Make sure you know what you want before you decide to invest your income in dividends. Also, remember that if you choose dividends, then you will also have to pay taxes on the income you earn from them.
Choose your broker
After you know what kind of account you want, make sure to choose your broker. Do your research and understand the charges taken by your selected brokerage and then choose one that suits you best.
Complete the KYC process
After that, complete the KYC process. A customer support executive from that brokerage will help you out here, with the filling of form and everything else associated with the process. Most brokerages offer you a demat and trading account combined to store up the securities.
Next, you need to share proof of identity and other proofs like income, address proof, etc. Sharing a photocopy of your PAN and Aadhar card is also important so make sure you have all documents ready before proceeding.
After this, your brokerage will do their part and conduct a verification. If you don’t wish to verify the documents manually, you need to go for the online process of KYC. For that, your PAN card must be linked with the Aadhar and the bank account. The mobile details shared within the account opening must be the same as it is your Aadhar card needed for the online KYC process.
Note: Do note that it will easily take you 3 to 4 days to start your own trading account after the verification process has been completed.
Now that you have understood how to build and establish your demat account, make sure to get started today. Also, if you need some stock trading advice or some more suggestions on how to open trading account in depth, make sure to check out other blogs.