With the accessibility that trading accounts provide, trading in financial markets has become a viable investment opportunity for many Indians today. However, there could be a number of reasons why despite the many benefits, people might opt-out of a trading account. To do this, they must follow a certain procedure and make note of a few factors. Here is a closer look at how to close a trading account:
Reasons for closing a trading account
Trading accounts open up the opportunity to grow your wealth and develop financial expertise. Therefore, closing a trading account is an important decision that traders must carefully think about. However, there are a number of factors that might lead traders to close their trading accounts:
– The most common reason for a trader to close his trading account is to declutter his trading practices. As they develop expertise, traders tend to branch out with their trading accounts. They might have one for equity, another for derivatives, and yet another dedicated solely to intraday trading. Eventually, he might wish to focus on some of them and thereby close a few.
– Another reason that a trader might wish to close his trading account is that despite his efforts, he has not achieved much success with his strategies. As a result, he might wish to close his trading account. However, one way of resolving this problem could be to first practice with a demo trading account. For instance, Angel One offers trial trading account that allows traders to first trade with virtual money and fine-tune their strategies.
– It is also possible that due to changes in life circumstances, a trader might not have time to continue trading.
– In certain cases, some traders close their trading accounts because they are unhappy with their stockbroker’s service or platform. This can be avoided by doing a fair bit of research before selecting your broker or DP. A company like Angel One comes with an experience of over 30 years and has over 1 million satisfied customers. They provide research and guidance as well as complete support for your daily trading. Factors like this can make the difference between finding the right broker and having to close an account prematurely.
How to close a trading account
To start your trading venture in India, the first step is to open your own trading account. Here are the step you should follow to open a trading account:
– The first step to closing your trading account is to notify the brokerage company or Depository Participant that you had opened it with.
– You will be requested to fill out an Account Closure form, the details of which you must check carefully. You can easily find this form either on their website or at one of the DP branches.
– If there is more than one holder of the trading account, the form should be signed by all holders. It is also important to fill out the reason for closing the account in your Account Closure form.
– After filling the Account Closure form, you will be required to submit it to your nearest DP branch.
– Since your trading account and demat accounts deal with securities, make sure you clear the board before opting to close your trading account. Here are a few important things to keep in mind regarding the matter.
Closing a trading account – things to note
– If you are closing a connected demat account with your trading account, make sure that there are no shares or other forms of securities there. You could sell them out or get them transferred to another demat account. You could also have them rematerialized and store them as physical certificates.
– Your connected demat account should also not reflect a negative cash balance. In such a case, your request to close your trading account would get rejected.
– There will be no charges for closing your trading or demat account.
– Typically, after filling out the necessary documents, your request will be processed and your trading account will be closed within 3 to 7 business days.
Trading accounts can be a goldmine of opportunities to trade in various financial markets. However, owing to circumstances, it might be necessary to close your trading account. In such a case, you can simply follow the aforementioned procedure and close your trading account.