How to start investing in stock market?
‘Saving’ means to put your money to rest. ‘Investing’ means to put your money to work. Investing in equities is one of the best ways to stay ahead of inflation in the long term due to the high returns.
One should always set aside some part of their income for saving and investing. There is a difference between saving and investing. Saving means part of income which is not spent, while investing means putting the money to some good use on which return can be earned like Real Estate, Gold, FD, Mutual Fund, Equity etc.
One can invest in a company either directly or indirectly. Directly means purchasing the stock of the company directly through stock exchange. Indirectly means giving your money to mutual fund managers who then invest pooled money of a large number of investors in companies after analyzing and researching various companies in details. However, return received is high when a person invest directly.
Read Also: 8 High return Tax Saving Investment schemes
If you want to invest directly in companies through stock exchange, then there are certain prerequisites to start investing in shares.
1. First thing is you must have an Aadhar Card and a PAN Card. These two documents are compulsory for investing in India. Through these documents KYC (know-your-client) is done by stock market regulator SEBI (Securities and Exchange Board of India).
2. Second, one needs to open a Demat Account online through a broker. Demat account is compulsory, through it you can store your shares in dematerialised form. There are many popular broker like Zerodha, Paytm, Upstox and angelbroking where you can open your demat account. Some brokers provide free accounts and some charge account opening fees which you will have to pay.
You can open FREE DEMAT ACCOUNT with Angel broking through this link. Free Demat Account Opening link
Angel broking is a big brand having more than 30 Years of experience in the broking world and more than a million happy customers. Angel broking is one of the leading full-service brokers in India which offer flat brokerage charge to its clients. It provides fast, modern, and easy to use trading platforms as well as expert advisory services to its customer base.
Angel Broking now offers a flat rate brokerage plan, named ‘Angel iTrade PRIME’. Here, the delivery trading is FREE of cost. And for all other segments i.e. Intraday, F&O, Currencies & Commodities, they charge a fixed rate of ₹20 per trade. The same simple rate is applicable across all exchanges and segments.
Step-by-step procedure to open your Angel Broking demat account
Step 1: Go to the Angel Broking account opening page. Click here for free demat account opening.
Step 2: Enter your Full Name, City, and Mobile Number on the Account opening page. You will receive an OTP to verify your Mobile number.
Step 3: On the next page, you need to enter a few other important details. Here, you have to provide your date of birth, PAN Number, email id, Bank account number, and IFSC code. After entering the details, click on ‘Take me ahead’.
Step 4: Next, you have to complete your KYC verification. You have three options:
- Share offline aadhar -You have to upload documents.
- Share via DigiLocker – On choosing share via Digilocker you have to enter Aadhaar number and verify it using OTP.
- Enter details manually – you have to fill Address, Upload photo, PAN etc.
Read Also: SEBI New rules for Multi- Cap Mutual Funds
Step 5: In this step, you have to provide your annual income, occupation, father, and mother’s name, etc.
If you have selected to upload details manually in step-4, then you have to upload your bank statement, PAN card, address proof and your signature on the next page.
After entering details and uploading documents, click on ‘Continue’.
Step 6: Next is the eSign process which is very simple. Here, you’ve to enter your 12 digit Aadhar card number. After that, you’ll receive an OTP on your registered phone number with Aadhar. Enter the OTP on this page and click on ‘Submit’.
Step 7: The final step is to submit the Power of Attorney (POA) form. This POA submission step is required by any broker with whom you open your demat account in India.
In this step, you’ve to download the POA form, physically sign it and courier or speed post this form to the Angel broking head office. Else, you can also ask the angel broking executive to come to your address and collect the signed POA form.
Note: Even without submitting the POA form, you can trade with Angel broking as your account has already been opened. However, for long term investments, you can buy stocks but can’t sell while delivery trading if you’ve not submitted POA form.
if you face any difficulties while opening an account online, you could contact Angel Broking, at : 022-68071111
This is the complete process to open your FREE demat account at Angel Broking.
Read Also: Income tax on shares and securities in India
What next after opening Demat account?
Once demat account is opened, one can start purchasing the shares of your choice. Investing in stock market can begin from even less than Rs 100. You have to select the price at which you want to buy the share and the quantities of share.
After stocks are purchased, it will reflect in your portfolio balance and you will also get email from stock exchange (NSE/BSE) of your purchase report. Once you purchase a stock, you become a member of the company in which you invested. You will be getting notices of AGM, other major decisions and issues. You will also be entitled for dividends that company declared for shareholders.
Important Things to Note
- If you are a beginner, you should start with small amount of fund and understand your risk. There is a difference between investing and trading. Trading involves and attempt to make gains from the fluctuations of stock market. Investing means putting your money in value researched companies like Reliance, TCS, SBI etc, for a long time to get good returns.
- It is advisable to take the advice of some expert before going big in stock market. One can watch News channels like CNBC, Zee business, etc, to gain knowledge about the listed companies. If you are from commerce background you can try to research about the company yourself by reading company’s annual report, balance sheet, future plans, managements statements and financial ratio.
- Once you decide the stock/stocks you want to purchase, you can place the order through your demat account. While purchasing you may see 2 types of orders to choose from.
- Market Order- When you select market order, the stocks are purchased immediately at the current market price.
- Limit Order- In a limit order you can set a price on which you would like to purchase. When the market price matches with your limit price and the sellers are available for the stock, the order is executed. In a limit order the stocks are not purchased until the market price is equal or lower than limit price set by you.
The author of the above article is Manav Khanna.
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