Opening a trading account is not as difficult as people think. It is all about assorting step-by step measures to get started with your investments in stock trading, equities, shares etc. Here is a guide to create a new trading account for investment in India.
Creating Bank Accounts for Trading
Generally, it is necessary to create three bank accounts for purchasing and selling stocks, commodities, shares and equities. If you are based in India, and want to trade in Indian currency, it is highly preferable to open the accounts with an Indian bank for hassle free transactions and avoid currency conversion charges. The three types of accounts needed for trading practices are:
Savings Bank Account: People mostly have their savings accounts in one or more banks to maintain a certain portion of liquid assets that can be withdrawn or amount deposited further as per requirement. The banks pay an annual interest on the amount in the account regarded a source of guaranteed monetary returns. You can use your existing account or create a fresh one that you wish to use for the trading purposes only.
Share Trading Account: This account is used for buying and selling shares and equities through your broker. Some sources offering share trading accounts include ICICI Direct, Reliance Money, India Infoline etc.
Step 2: Create Demat Accounts for Trading
Demat Account: The Demat Account or the dematerialized account is a kind of banking account used to regulate the process of dematerializing physical/ paper-based stocks shares etc. The investors can avoid holding the paper based or physical shares with the help of their Demat account while purchasing and selling the shares through a stockbroker.
Demat Account Opening Procedure
A) Get Demat account request form (DRF) from the Depository Participant (DP). You need to have your depository account with the concerned DP.
B) Once decided to dematerialize the equity share certificate, you need to deface it and write ‘Surrendered' on it
C) Next, it is the turn to submit the equity share certificate and the DRF to the DP.
Once the submission is accomplished, the DP forwards your documents to the issuer or it's R&T Agent. Upon verification and processing completion conducted by the issuer, the dematerialized securities will be credited to your DP depository account.
Essential Document Required at the Time of Account Opening
The documents that you need to produce to the bank or other financial institution varies from one organization to another depending on their policies. Generally, one or more of the following documents are considered for standard identity authentication of the person.
Creating Bank Accounts for Trading
Generally, it is necessary to create three bank accounts for purchasing and selling stocks, commodities, shares and equities. If you are based in India, and want to trade in Indian currency, it is highly preferable to open the accounts with an Indian bank for hassle free transactions and avoid currency conversion charges. The three types of accounts needed for trading practices are:
Savings Bank Account: People mostly have their savings accounts in one or more banks to maintain a certain portion of liquid assets that can be withdrawn or amount deposited further as per requirement. The banks pay an annual interest on the amount in the account regarded a source of guaranteed monetary returns. You can use your existing account or create a fresh one that you wish to use for the trading purposes only.
Share Trading Account: This account is used for buying and selling shares and equities through your broker. Some sources offering share trading accounts include ICICI Direct, Reliance Money, India Infoline etc.
Step 2: Create Demat Accounts for Trading
Demat Account: The Demat Account or the dematerialized account is a kind of banking account used to regulate the process of dematerializing physical/ paper-based stocks shares etc. The investors can avoid holding the paper based or physical shares with the help of their Demat account while purchasing and selling the shares through a stockbroker.
Demat Account Opening Procedure
A) Get Demat account request form (DRF) from the Depository Participant (DP). You need to have your depository account with the concerned DP.
B) Once decided to dematerialize the equity share certificate, you need to deface it and write ‘Surrendered' on it
C) Next, it is the turn to submit the equity share certificate and the DRF to the DP.
Once the submission is accomplished, the DP forwards your documents to the issuer or it's R&T Agent. Upon verification and processing completion conducted by the issuer, the dematerialized securities will be credited to your DP depository account.
Essential Document Required at the Time of Account Opening
The documents that you need to produce to the bank or other financial institution varies from one organization to another depending on their policies. Generally, one or more of the following documents are considered for standard identity authentication of the person.
- Income tax PAN card
- Voter's ID
- Passport
- Ration card
- Driver's license
- Photo credit card
- Employee ID card
- Bank attestation
- Income Tax returns
- Electricity bill
- Landline phone bill
In addition to these you, need the passport size photograph and submit the photocopies of the above mentioned documents. However, the customers need to produce the original documents at the time of verification by the bank officials. For the Demat account generation, the DP may ask the client to sign an agreement on non-judicial stamp paper.
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