Want To Open A Trading Account Online? Here’s All You Need To Know
India's economy boomed ever since the country announced economic liberalisation in 1991. India got liberated and is continuing to grow steadily. And that's why investing in it by way of shares and securities, in the long run, will never fail you. As a first step towards this journey, you need to open a Trading Account.
What is a Trading Account and how does it work?
A Trading Account is an electronic platform through which you can buy and sell shares and securities. It is the digital avatar of the outdated open outcry system earlier used to trade at stock exchanges. A Trading Account is a link between your Demat and bank account. When you buy shares using a Trading Account, the purchase amount is deducted from your bank account, and the shares bought are credited to your Demat account. A similar reverse transaction takes place in the case of a sale of shares.
Each Trading Account is password protected and has a unique trading ID mapped to it. These enable you to conduct transactions in the stock markets safely and securely.
Additional Read: Joint Demat and Trading Account Details
Why should I have an online Trading Account in India?
Besides the fact that it is mandatory as per SEBI guidelines to have a Trading Account to invest in the stock markets, here is how an online Trading Account could be beneficial for you:
- An online Trading Account gives you access to leading multiple stock exchanges like Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Multi Commodity Exchange (MCX), etc.
- When you open a Trading Account online through a quality broker, you can access heaps of relevant financial research, data, and reports. These can help you in making informed trading decisions.
- An online Trading Account gives you an experience of smooth execution of trades, where you conveniently place orders and monitor your portfolio at a click of a button.
- A Trading Account gives you a completely customised experience to set trade alerts, modify orders to your preference.
How to open a Trading Account Online in India?
The way to open a Trading Account online is simple. The following process will ease it out for you:
- You can open a Trading Account only with a registered broker or a brokerage firm. There are ample brokers in India. Please select the best one for yourself after weighing their service quality, features, and charges. ICICI Direct is one such registered broker providing an array of features, premium service quality at the best rates.
- Contact your selected broker for opening your account. You can do that easily through their website or app.
- Fill in your Trading Account opening form. This step might require you to submit your KYC details by providing soft copies of usual mandatory documents like address proof, bank details, etc.
- Get your application verified. That is done by an in-person or over-the-phone check by the broker's representative.
- After your application is processed, you will get your Trading Account details.
- Your Trading Account is now live. Start trading!
Alternately, you can also use the offline process to open a Trading Account. Just visit the branch of your selected broker with your necessary documentation and complete the process.
What are the documents required to open a Trading Account?
Although the specific documents required by each bank, financial institution, or broker will vary, in general, you will have to submit the following documents to open a trading account:
- Duly filled and signed account opening form
- Identity proof such as PAN Card, Passport, Voter’s ID, Aadhaar Card, Driving License, etc.
- Address proof via documents like utility bills, bank statements, Ration Card, Passport, Voter’s ID, etc.
- It is to be noted that a PAN is mandatory for opening a trading account.
What is the eKYC Process for a Trading Account?
To make opening a trading account easier, the Securities and Exchange Board of India (SEBI) has permitted the KYC procedure to be carried out online. This is known as eKYC and the procedure for the same is as follows:
- Visit the official website of the bank, financial institution, or broker and go to the online application section.
- Here, you will have to enter basic information like your PAN and Aadhaar details, phone number, name, etc. You must have your PAN Card linked to your Aadhaar and bank account for eKYC.
- Next, you will receive a One Time Password (OTP) on the mobile number and email address linked to your Aadhaar.
- Following that, you will have to choose a scheme or package and share information related to the bank account you want to link to the account.
- Once you complete these steps, you will have to move on to the in-person verification process. It comprises your documents and identity being verified, transferring the margin money to activate the account, using an e-sign and entering an OTP to consent to the use of said e-sign.
As soon as you complete the eKYC process, your trading account will become operational and you can use it in tandem with your demat account to trade in the stock market.
Stock Markets are like an ocean of opportunities to create wealth. For a fruitful journey here, all you need is thorough research and investing discipline. So, if you haven't started trading in it already, start today.
Additional Read: 10 Golden investment rules for first time earners
Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Ms. Mamta Shetty, Contact number: 022-40701022, E-mail address: email@example.com. Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.