Hello friends, you are welcome on your website Prokeeda. Today we will talk about how to open a trading account and what is trading. What is the difference between Trading Account vs Demat Account and Benefits? In the previous article, we had known what is a Demat account and how to create a Demat account.
For the information of all of you, let me tell you that the Demat account and trading account are useful in the share market. Before understanding this, you will not have a society about Demat account and share market. Because only after understanding these two, you will understand about it. If all of you are not aware of the Demat account and share market, then you will get the link in this post for that. You can know about it by clicking on that link.
If you want to invest in the share market then it is mandatory for you to open a trading and Demat account. A few years ago, to buy and sell shares, we had to go to the stockbroker. And at that time the responsibility of buying and selling the shares of the investor was on the stockbroker. But with the advent of online trading services, now investors can buy and sell their own shares.
A trading account is opened by a stockbroker and this account is connected with your bank. Because if you sell shares from the share market, then that money is directly transferred to your bank.
If you all want to invest your money then you can invest money in Sensex and Nifty in the share market. Now we know what is the difference between a trading account and a Demat account. How to open an online or offline account in this.
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What is Trading Account?
A trading account is an account in which trading is done on shares. To buy and sell shares in the share market, an account is required, which is called all trading accounts. A trading account is similar to a bank account. We need this account to buy and sell shares in the same way as we transact pesos in the bank account.
We have already learned that this account is needed to buy and save shares. Because in order to buy and sell shares from the stock exchange, we need trading. If you want to invest in all share markets or stock markets then it is very important for you to have a trading account.
All of you must have this question in the mind of many people that what is the need for trading to invest in the share market. If you want to invest in the share market then all of you have to open this account.
We can never buy shares from the direct share market. For that, the stockbroker sends orders to buy and sell our shares to the share market. That’s why the stockbroker opens a trading account to access all our bought and sold shares in the stock market. If you want to trade in all the share markets then you have to open a trading account for that.
The account that a person opens for the information about the pesos invested in the stock is a trading account. You can know about the profit and loss happening in your shares in this account. This account works completely like a Demat account but there are some differences between the two. To know the complete information about this, definitely read the post from beginning to end.
Benefits of Trading Account
Now we know what are the benefits of a trading account. Keeping Shares in Trading Account is very beneficial because it gives us many types of facilities. If you want to keep your shares in trading then you should know about their benefits. You can know the benefits of trading in the points below.
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- Trading does not cause problems in buying and selling shares. In this, you can easily buy and sell shares.
- In this, we also give the facility of debit card and credit card to buy shares. Which you can pay easily.
- With the help of online trading, you do not have to place orders by calling.
- With its help, you can easily access any stock exchange.
- In this, you can work without zero paperwork.
- Using an online trading account leads to fewer broker charges. Which also benefits you.
- You can buy and sell shares from any place with just one mobile.
- With this, you can know the current price of your share, which you keep getting online updates of the shares.
- With the help of this account, you can buy and sell shares anywhere in the world. Which you can easily buy and sell foreign shares.
- In this, you are provided with the facility of Margin Money.
Trading Account vs Demat Account
Now we know what is the difference between a trading account and a Demat account. If you want to invest in the share market then you should know about these two. Some people consider these two accounts to be the same but there is some difference between these two accounts.
Now we know about the difference between these two accounts. Demat account is used to store shares and trading is used to buy and sell shares. Your shares are completely safe in the Demat account and the share is traded in trading.
If you buy shares with the help of a trading account, then its money is deducted directly from your bank. And the shares you have bought are stored in the Demat account. In the same way, if you sell shares, the shares are debited from your Demat account and the share money is transferred to your account.
How Does a Trading Account Work
Now we know how a trading account works. Joining of both trading and Demat accounts is done. Both these accounts are connected to your bank account. A trading account is used to buy and sell shares. If you want to buy shares from the stock market or share market, then for that you have to open an account in it.
We have already known that you cannot invest directly in the share market. you have to contact the DP (Depository Participant) who is a broker or sub-broker of NSDL (The National Securities Depository Limited) or CDSL (Central Depository Services (India) Limited). It asks for your order till the stock exchange.
You place an order on a stockbroker to invest in the share market. And the stockbroker pays that order with the help of a trading account. Similarly, if you want to sell shares in the stock market, then you have to take the help of a stockbroker for that. And the stockbroker gives an order to sell that share and after selling your share, his money comes in your trading.
Documents for Opening Trading Account
If you want to invest in the share market, then for that you have to open an account in it. Now you can see the list of documents below which you will not have any problem in opening the account. If you all want to open your Demat account then you may need these documents.
- PAN Card
- Ration Card
- Aadhar Card
- Voter ID Card
- Driving License
- Bank Passbook
- 2 passport size photo
- Canceled Check
- Electricity bill
- Income tax return
If all of you have all these documents then you can open an account.
How to Open Trading Account [Offline]
If you want to invest in all stock markets then you have to open trading for that. And if you want to open trading, then for that you need to open a Demat account. You can open trading from where you open a Demat account. After that, the broker joins both accounts. Now we know how to open a trading account.
To open an account in this, you must have a PAN card and must have a savings account along with it. To open an account in the trading account you have to contact the DP (Depository Participant) who is a broker or sub-broker of NSDL (The National Securities Depository Limited) or CDSL (Central Depository Services (India) Limited).
Apart from this, there are many such organizations that open this account. All these institutions work as depository participants. Apart from this, you can open trading by going to the bank. There are some people who do not trust the stockbroker. For those people, going to the bank and opening this account is a good option. You can open an account from the following banks.
- ICICI Securities Ltd.
- State Bank Of India.
- HDFC Securities Ltd.
- Axis Securities Ltd.
- Kotak Securities Ltd.
How to Open Trading Account Online
Now we know how to open an online trading account. For this, you have to follow the steps given below. To open an account, it is mandatory for you to have a PAN card, savings bank account.
First of all, you have to choose a good broker. The broker should be good and knowledgeable because the share prices keep changing all the time in the stock market. Being a good broker, he pays full attention to the share market. While selecting a broker, ask the broker for his charge that how much he will charge from you There are some brokers who do not have knowledge about the share market. But he becomes a stockbroker to earn money. It does no harm to them but it does a lot of damage to you.
First of all, select a stockbroker to invest in the share market. After that, take information about the stock from the broker, which stock should invest money on. If you are investing puzzle bar then you should invest less amount. Talk to the broker about the amount you want to invest.
The broker will collect the documents from you to open the trading account online. After that, the broker will open your account and advise you to invest in a good place. After that, the broker will buy the shares and send them to your Demat account. In this way, you can do online trading.
How Much Money Take to Open a Trading
Now we know how much money it takes to open a trading account. It takes 300 to 500 rupees to open an account in this. There are some DP (Depository Participant) who do not take money from you to open this account. And some DP (Depository Participant) also open a trading account while opening Demat accounts. Which opens your account for free.
If you invest in the share market, then some of its commission goes to the stockbroker. That’s why some stockbrokers do not take money to open both accounts. Apart from this, there are also such institutions from which you can open this account and all the institutions have different charges.
Apart from this, if you open trading from any bank, then the charge of all the banks is different. There are many banks that open trading and Demat accounts simultaneously. If you open trading from any bank, then the bank can charge separately for it.
When you invest in the share market, transactions happen in your trading account. We have to pay the charge of these transactions to the broker. Your broker charges you on the basis of percentage and this is called all brokerage. If you have any doubt related to this, then you can ask by commenting.
What is Online and Offline Trading?
Now let us talk about what is online and offline trading. For the information of all of you, let me tell you that offline trading does not happen because trading is always online.
Online Trading: Online trading means that you can open an account with the help of the internet and computer. For this, you can go online on their website with the software given by any broker. After going online, you can place an order direct stock exchange of a company. After that, the share goes to your Demat account.
Offline Trading: Offline trading means that you are investing in the share market or stock market through a broker. To invest in the share market, you have to meet the broker and tell him how much money you want to invest. After that, the broker will buy the shares and send them to your Demat account.
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Today we have known what is a trading account and how to create online and offline accounts in it. Today we have got complete information about this in simple language. How did you like this article and tell everyone by commenting?
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