Latest analytical reports claimed that over 3.76 million fresh demat accounts were opened in 2018 alone, surpassing the former record of 3 million demat accounts in 2007-08. This goes to show that opening an online brokerage or a demat account from reputed brokers such as Kotak Securities is helping investors reap the potential of equity by directly investing in shares. If you are an NRI, you may find it useful to know how to go about investing in the Indian stock market with the help of these crucial tips.
To invest online, a trader needs a demat account opening with any of the discount brokerages or full-service brokers in India. The primary distinction between the two is the kinds of products and services offered by either category.
Industry experts opine that subscribing to IPO through full-service brokers can be a better option.
To invest in the stock market, a trader needs a bank account, a trading account and a demat account. A demat account merely stores holding securities in a digital form whereas a trading account helps a trader invest in shares, mutual funds, gold ETFs and IPOs.
Securities in a demat account are held by a Depository Participant (DP). There are two DPs in India mainly the NSDL and the CDSL.
A brokerage account can be opened online. Transactions take place through the trading and demat account. However, to get started it is important to sign the Power Of Attorney in a physical format.
Having a 3-in-one-account can help in seamless trading. For example, if a trader has a savings account and a demat account with XYZ bank, but a trading account with ABC broking house, it would take time to credit the amount to the bank. Here, a trader could lose out on excellent investment opportunities and also on the savings account interest. Hence, industry experts recommend having a 3-in-one account with one institution.
By having an account with the same institution, a trader can avoid signing the Delivery Instruction Slip each time.
It is essential to look into the fees when selecting a broker.
Some brokers tend to waive off opening fees or annual maintenance charges. However, consider transaction charges and others such as one-time or recurring expenses.
Choose a brokerage firm that charges a flat fee for all transactions. This can help you to concentrate on trading instead of calculating your costs every time you transact.
The basic rules of investing are to consider equity for long term rather than short-term gains.
It is imperative to make an informed decision and hold on to your investments, disregarding short-term market fluctuations.
Look into the technical aspects of a brokerage firm. A robust technology platform that offers consistent results, especially at the time of trading can give you the confidence to easily navigate and make smart trading decisions. Serious investors emphasise on the importance of technology more than brokerage fees.
Have complete control over your transaction and investments at all times. Opt for a broker based on the quality of information and ease of transaction provided.
Momentary changes in prices must not concern you. Since stock market prices fluctuate every minute, it is vital to analyse those that address your long-term objectives. With patience, your investment can multiply and build wealth.
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