If a person wants to trade/invest in securities, the only pre-requisite required is that they should have a Demat & Trading Account. Without a demat& trading account, a person cannot trade/invest in shares and this is the only thing required for investing in shares.
If a person has a Demat& Trading Account, he gets eligible to trade on both the Bombay Stock Exchange (BSE) as well as the National Stock Exchange (NSE). If a person wants to trade in Commodities, he can also trade through the same account on the Multi-Commodity Exchange (MCX)
Importance of Demat& Trading Account
A Demat Account is an account which allows an investor to keep copies of all the shares in digital form in which the investor has invested. Share Certificates can no more be held in physical form and can only be held in Digital Format in a Demat Account and this is the reason why having a demat account is compulsory.
All share certificates are kept in digital format in this demat account are linked to the NSDL or CDSL which ensures that there are no issues of forged shares.
Apart from holding Shares in a Demat Account, other financial investments like Bonds, Mutual Funds etc can also be kept in digital form in a demat account.
The other thing required for investing in stocks is a Trading Account. A trading account gives an investor access to the stock exchanges through which he can buy/sell shares. Thus, through a trading account – an investor buys/sells his shares and these purchased shares can then be kept in digital form in a Demat Account.
A person can have Trading and Demat Account with 2 different providers or with the same provider. If an investor has Trading and Demat Accounts with 2 different providers, the investor would be required to link Demat Account withTrading Account. Having both demat and trading account with the same provider makes it easier for the investor as he does not have to deal with 2 different providers.
How to open a Demat & Trading Account
There are brokerage firms where a demat & trading account can be opened. Most of these providers also give you web and app access to these accounts and you can trade from anywhere on the go.
You can open a demat account with any of these brokerage firms by submitting basic documents like PAN Card, Aadhar Card and other KYC Documents and once all documents are submitted, a demat account is opened within a couple of working days. Some brokers also have 100% digital process for opening a demat account.
Types of Brokerage Accounts
There are 2 types of brokerage accounts i.e. discount brokerage and full service brokerage. The discount brokers offers limited functionalities but there brokerage fees is also very low as compared to the full service brokerages which charge a higher fees but also offer various services like Research Reports, Stock advices etc.
Discount Brokerages are mainly for expert traders who do their own research and analysis whereas full-service brokers are for non-experts.
Brokerage Fees and Charges
Most brokers charge a fixed annual fee of a few hundred rupees for maintaining the Demat/ Trading Account.
Apart from the annual fees, they also charge a brokerage fee which usually is a small percentage (0.2% to 0.75%) of the amount invested. Some brokers (especially discount brokers) prefer to charge a fixed brokerage fee instead of a variable fee.
Angel Broking Trading Platform
One of the most trusted and seamless platform for trading in shares is the Angel Broking Trading Platforms which is being used by a lot of experts. The user interface is designed in such a manner that it makes very easy for anyone to buy/sell shares and its technological platform is crafted so beautifully that there are barely any technical glitches.
It does not charge any fees for delivery trade and charge a very nominal fee of Rs. 20 for intra-day, F&O, Currency and Commodity Trades. It is a 30 year old company which has over the years built a lot of trust and loyal customers.
Open an account with Angel Broking.