What is Trading Account?
A trading account is important if you want to trade in the stock market. The process of buy and sell of the stocks are executed through Trading Account. The article covers how to open trading account in India?
In the past trading, traders relied on hand signals and verbal communications for purchasing and selling of stocks. Since the stock market was operated electronically, the trading account took over the open-outcry system. The traders or investors do not require physical presence. Instead, they must create an account at the brokering firm. Through the account, the stockbroking firm handles the trades on the exchange. Each trading account has a an individual user ID which assists with online transactions.
Choose the best trading account in India wisely. Make sure the broker is good, and your orders take place in good time. The market price of the stock might vary even a few minutes. Make sure you choose a best broker to open trading account in India.
What is Demat and Trading Account?
The primary difference of Demat Accounts and Trading accounts is that your bonds, securities, and shares should be kept electronically. To store electronically these documents your Demat Account is used. The trading account can be utilized to buy shares and stocks as well as to invest in the market for stocks. To be able to trade it is necessary to open an account with a Demat account as well as trading account. The two accounts Demat as well as trading account are crucial to trade.
By opening a trading account and linking it with your Demat account, you can make the most of the electronic solutions offered by the brokers.
Documents required to open Trading Account
The Trading account acts as a mediator between Demat and savings accounts.
Proof of Income
- Income Tax Return (ITR) Acknowledgement slip that is submitted to the Income Tax Department during tax filing photocopy.
- Either a certificate of net worth or a copy of the annual statement of accounts authenticated by a Chartered Accountant.
- Salary slip of the current month
- Bank account statement containing the income history of the last 6 months.
- Documents that confirm the ownership of assets through self-declaration.
Proof of Identity
- Pan card with a photograph that is valid
- Aadhaar card / Voter ID card / driving license/ Passport.
- Identity card with a valid photo of the applicant issue by Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, University affiliated Colleges, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council, and Credit/Debit cards issued by Banks.
Proof of Address
- Passport/Voters Identity Card/Ration Card/Registered Lease or Sale Agreement of Residence
- Driving License/Flat Maintenance bill/Insurance Copy.
- Bills of utility like landline telephone bill, electricity/gas bill which is not more than 3 months old.
- Bank Passbook should not be older than 3 months.
How to open a Trading Account?
To start trading in Share Market you must have trading account. You need to look for the desired stockbroker with whom you want to open a trading account. Here are the steps to follow to open a trading account.
- Look for a stockbroker who has a track record of executing orders timely. It is important to trade on time so it is necessary to choose the right one.
- There is a set brokerage that differs for every stock broker so it is necessary to see the comparison between the broker’s broking plan so one can choose the one with the least brokerage charges to save on the trade.
- Look for the right broking firm and ask for the procedure of the trading account opening.
- Moreover, you can easily open a trading cum Demat account with most of the leading stockbroking firms.
- Add the phone number and other required details such as name email and confirm the data by the OTP received on them.
- After this fill in the other details and submit the required documents.
- You need to confirm the documents and the KYC process for the same.
- After Confirmation of documents you will be able to execute the trade after 24 hours of the account opening.
Note – For more information, you can read our blog how to open demat and trading account in India.
Conclusion
We hope this article will provide you with an understanding of how to open trading account in India and documents required for that.
But before opening the trading account you have to select the best stock broker in India. You can read our blog to know about top 10 best stock brokers in India. We have analysed the top 10 brokers with different parameters. Choose the best out of them. It is essential to, as a general rule, choose an affordable service to meet your needs be sure to check the software and analysis tools before settling on an agent.