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If you want to buy and sell shares in the stock market, then opening a trading account is the first step. In India, this process is regulated by SEBI. They ensure that investors are protected and that all transactions are carried out in a fair and transparent manner.
A trading account is like a bridge between your bank and your Demat account. It also allows you to access features like collateral margin. With the help of this, you can use your existing shares to increase your trading limit without adding extra cash.
Key Takeaways
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A trading account is needed to buy and sell shares in the stock market.
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It works as a link between your Demat account and bank account.
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You can open a trading account online or offline through a SEBI-registered broker.
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Choosing a reliable broker makes trading easier and safer.
What is a Trading Account?
A trading account is needed to buy and sell shares in the stock market. While your shares are stored safely in your Demat account and money moves through your bank account, the trading account acts as the link between the two. It is the tool that helps you place buy and sell orders. Without it, you cannot trade in equity markets. While IPO shares are credited to your Demat account, you need a trading account to place a sell order later. Many investors also explore features like what is collateral margin to enhance their trading limits using existing holdings.
How to Open a Trading Account Online?
Opening a trading account online is quick, simple, and can be done from the comfort of your home with just a few basic documents.
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Choose a stockbroker: Start by selecting a SEBI-registered broker that suits your needs. Compare their charges, features, and customer support before you decide to open a trading account.
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Compare services and brokerage: Look at the brokerage rates, trading tools, and extra services offered. Some brokers provide research and tips, while others focus on low-cost trading.
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Visit the broker’s website: Go to the official website or app of your chosen broker and find the option to open an account online.
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Fill the application form: Enter your personal details, PAN number, contact information, and bank details carefully.
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Upload KYC documents: Submit scanned copies of your identity proof, address proof, photo, and signature. Some brokers may also ask for a short video verification.
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Complete e-verification: Verify your details using Aadhaar-based OTP and e-sign the form digitally.
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Receive login details: Once approved, you will get your trading account credentials. You can now log in, add funds, and start trading.
Following these steps makes it easy to open a trading account without paperwork or long waiting times.
How to Open Trading Account Offline?
1. Select a Trading Member - Once you have compared the services and benefits offered by different trading members, you can finalise the most suitable trading member for your needs.
2. Fill in the application form - You will need to fill out an application form for opening a new trading account. Along with this, you will need to submit a list of documents such as Identity Proof, Address Proof, PAN card, Bank details, segment details, your personal details, nomination details etc.
3. Verification process - You will be given a list of rules and regulations to ensure ethical and legal trading, and to clear any doubts you may have regarding holding a demat-cum-trading account and the different functions it serves. The trading member will conduct an in-person verification of you and your KYC documents.
4. Final approval - Once your documents are verified, and the final formalities are completed, your new trading account will be opened. You will also be given the Unique Client ID for your account.
Also Read: Documents Required For Aadhaar Card
Documents Required to Open a Trading Account
Like most other services, you need to submit a few documents to create a trading account. While these requirements can vary. Here are the general requirements:
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PAN card is compulsory for opening a trading account.
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For proof of identity, you can submit a passport, voting ID, driving license or Aadhar card.
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The address can be verified by submitting documents like telephone bill, electricity bill and water bill.
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A photocopy of the PAN card, address proof and identity proof has to be submitted, with the original for the manual KYC process.
Some brokers also carry out a telephonic or manual verification process. The trading account is activated by the broker within 48 to 72 hours after the application and documents are accepted. If you do not want to submit the physical copies of the documents, there is an alternative method.
Read More: What is a PAN Card?
E-KYC Process to Open a Share Trading Account
If you want to avoid manual KYC, you can opt for the E-KYC method through the Aadhar card. For the E-KYC method, you will have to ensure that your Aadhar card is linked to tyour PAN card and your bank account. The mobile number linked to the Aadhar card should be the same as the mobile number submitted in the trading account application.
The Aadhar verification is done online through a one-time password. You will also have to upload a copy of the PAN card and a cancelled cheque. You will be then asked to e-Sign the documents and your trading account opening journey will be completed from your end.
Read More: Aadhaar e-KYC
Conclusion
With the advent of the internet, opening a trading account as well as investing in markets has become easy. Brokers have simplified the process of trading, which is also a reason for increasing participation in the capital markets. If you are interested in trading, you can open a trading account with Angel One, one of the trusted stock-brokers in India.
