Complete guide on how to open online trading account

Since the beginning of the century, financial markets have changed significantly. Electronic trading replaced open outcry trading and ushered in an era of transparency. When transparency increased, both domestic and foreign institutions began operating in India. New investors entered the market as a result of this. 

Most brokers now offer an online option for opening trading accounts, which has led to internet trading being popular among young people. There are many trading platforms where anyone can get his trading account.

What is the need for the trading account?

A trader needs an online trading account to trade shares, securities, commodities, and any other financial underlying asset on the stock market. Neither you nor the broker acting on your behalf can make the trade without a trading account.

List of Documents Needed to Open an Account for Trading

There is some documentation you should have on hand before you start opening a trading account. All traders must submit these documents, even though the procedure for unlocking a trading account is essentially the same for all DPs/depository participants.

Document needed for income proof:

1. An ITR copy or income tax return is required or,
2. Copy of the yearly statement of accounts or the net worth attested by a CA or,
3. Form 16 or the current month’s salary slip or,
4. Bank statement for the last six months.

Identity proof:

A Pan Card with an appropriate photo is mandatory when you open a trading account. Aadhar cards, voter cards, licenses, passports, and government-issued ID cards with one legally acceptable photo are all acceptable for identity proof.

Residential proof:

You can use any of the following as address proof: voter identification, an Aadhar card, an energy or gas bill, a phone bill, or a residence certificate from a Member of the Legislative Assembly or Member of Parliament.

How do you open a trading account?

You must first participate in actual trading before incorporating your trading knowledge. You must visit or associate with a depository participant cum stockbroking firm to open a trading and Demat account. When you register for an online trading account, you may become paperless.

1. Step One: The first and most important thing you need to do is choose a reliable stockbroker who can meet all your trading requirements. Ask the broker if they provide all the required trading services you require. Always remember that in the trading industry, time is money. Make sure the broker’s trading platform is simple to use on both their website and if they have one, their mobile app.

2. Step two: After finding the right stockbroker, check their brokerage rates and compare them with other firms. Each stockbroking firm has different brokerage rates and processing charges. Before opening a trading account, ensure you get all the information you require regarding the account opening charges for trading accounts and other fees if any.

3. Step three: Fill out the forms for a trading account, a Demat account, and KYC after choosing a stockbroker. Here’s how to fill out the form if you’re starting a trading account online.
   • Open the application page,
   • Then you should enter your name, PAN information, phone number, email address, home address, bank account information, etc.
   • Upload all required documents, including identity proof, address proof, a bank copy, a cancelled cheque, a photo, and income proof.
   • Create a short video of yourself, then upload it to prove your identity.
   • Finally, you should e-sign the document and finish the form filling.
4. Step four: The stockbroker will double-check your details after you’ve completed the form. You will receive your login information for your trading and Demat account once your information and supporting documents have been confirmed. You can now start your trading journey. After depositing a certain amount from your bank account to the trading account, you can purchase or sell any share on the market. You can look at the live market share prices, create a watchlist, buy shares of the top companies, and do a lot more.

Here are some frequently asked questions about your trading account

1. Can anyone open a Demat account jointly?

It is possible to open an online trading account in the names of both joint holders. The number of holders in such a shared trading account is limited. There can only be one primary account holder and two joint account holders, for a total of three account holders.

2. Is trading online secure?

It is secure to deal with an online trading account, thanks to various advanced security and verification systems. All brokerage firms now use the CDSL-generated T-PIN-based authentication mechanism. T-PIN is a one-time user-generated PIN that can be used to place orders through CDSL’s Demat accounts after being confirmed. If your broker opens your CDSL account, you can file a lawsuit against this facility.

3. Does a Demat account require nomination?

According to SEBI regulations, a nomination form must be submitted along with each application for a Demat account. A written declaration must be provided by someone other than the person who wants to submit a nomination.

4. Can I buy and sell shares without opening a trading account?

Each buyer and seller must have a trading and Demat account to trade on the stock exchange. These two accounts are linked to each other. The shares are moved to the Demat account and kept electronically when you trade.

Final thought:

Now you can understand how to open a Demat and trading account. Thank you for taking the initiative to open a Demat and trading account. This step is crucial for your financial stability. Before you start trading, It is a good idea to review the fundamentals of stock selection and how to build a diversified portfolio.

If you’re confused, you can take advice from knowledgeable businesses like Piramal Finance. In these fields, Piramal Finance is a reputable company. They can advise you on stock market trading. They can even suggest which stock is best for you.