Let's enter directly to the point.
- Open an account with a broker because you need
- Demat account to take delivery of stocks.
- Trading account for equity and currency derivatives.
- Commodity account to trade commodity futures on MCX.
Necessary documents :
- PAN card
- Address proof (any one): Land line telephone bills, Electricity bills, bank statements etc., attested copy of Passport/Driver’s License/AADHAR Card.
- Bank Account detail: Cancelled cheque with Name, IFSC, MICR printed on it
- Income proof (for F&O only): Any one -Form-16, IT acknowledgement copy, 6-month Bank statement (will also act as an address proof), Stock Holding Statement or the CA certifying your networth.
- Passport size photos
NB: If you have demat account already, you are KYC compliant and don’t need the PAN (only No. will do) and address proofs (if the same is unchanged).
2/3. When your account is ready, you can request for demo/s from your broker to understand the order placing system and other facilities. You can add stocks and start following their movements and make your own strategy to select and follow and place your order.
3/2. You can transfer fund from your bank account to your trading account and start trading cautiously. You can start with Blue chip stocks which are unlikely to collapse or solid enough to bear/recover a crash in the market, if any.
4. Investing in Mutual Funds may be good for you as a beginner. It may help you track movement of stocks sector wise. On the other hand it will reduce the risk factor that relates to the performance of the particular stock/s you picked.
It is good to have an expert (Distributor) to manage your MF investments but you have to pay charges for the service resulting into reduction of your return. Since Mutual Funds are meant for long term investment, your gross payment on account of charges only will reach a sizeable amount. After enrolment of GST the service charge is likely to go up by 3% which means you have to spend more.
Here, The more you learn, the more you earn.
Intelligence and Patience are the key factors for an investor.
5. Gradually you will gain confidence in your research. During this period, you will learn very fast. You will collect/access materials to satisfy your knowledge to be a successful investor.
One little suggestion:
As you are a beginner, you may go for discount brokers. In this respect, Zerodha may be suitable for you as they are the most cost efficient and provides you good platforms and services.They charge you the lowest
- They charge you Rs 0 (Zero) for delivery and 0.01% or Rs 20/- whichever is lower per executed order for intraday trades across equity, commodity, currency on BSE, NSE and MCX.
- One can trade and invest trough their technologically advanced platforms Pi for desktop and Kite for web/iOS/android with advanced options like bracket order, cover order, trailing stoploss, charts, etc.
- As a beginner, you may step in cautiously by investing in Mutual Fund. Zerodha have a platform called Coin that lets you buy mutual funds online directly from asset management companies/fund houses and completely commission free. It’s good for you if you wish to go for recurring investment. They charge you nil for investment upto Rs 25,000/- and for any amount more than 25k you have to pay flat Rs 50/-. This is very cost effective for an investor. You get facility of
- Choosing and Buying MFs directly from AMC/FH without paying upfront & trailing commission (one has to pay if purchased from a distributor) for each following year.
- Keeping in your Demat
- Keep all investments in equity, currency, MFs at a single place
- Easy SIP, start, modify and stop as and when you think
- Track NAV, purchase and redeem funds as per NAV
- Watch Profit & Loss
- Get Single capital gain statement, easy for taxation
Where some others have no charge for opening account opening, Zerodha charges: Rs 500/- [Rs 300/- for Demat & Equity and Rs 200/- for Commodity]
Other charges of Zerodha may be presented at a glance below:
Other charges of Zerodha may be presented at a glance below:
They have introduced Aadhar based instant account opening.
You may click here to reach account opening page of Zerodha.
You may click here to reach account opening page of Zerodha.