How to Invest in Share Market: Beginner Guide

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Investing in the share market provides an online platform for raising money. Investing is tricky for beginners. Before investing one should have knowledge of the share market. For investing in the share market one should have a Demat and trading account.

What is Share Market?

An online platform where all the financial securities are bought or sold by the investors or traders in the stock exchange.

Share Market

What is a Demat Account?

A Demat account is an account in electronic format which keeps a record of share certificates and other securities. A Demat account makes the process of holding investments like shares, bonds, government securities and maintains the physical handling of paper shares and related documents electronically. The Demat account contains details of the shares and other securities in your name.

There are three types of Demat account:

  1. Regular Demat Account: For Indian citizen
  2. Repartiable Demat Account: For NRI (Funds can be transferred abroad . It is linked with NRE Bank)
  3. Non- Repartiable Demat Account: For NRI (Funds cannot be transferred abroad . It is linked with NRO Bank)

What is Trading Account?

A trading account is an online investment account that traders use to purchase securities and monitor trades. The trading account allows an investor to buy and sell securities such as shares, debentures commodities, foreign exchange, zero-coupon bonds, etc, in a public market. Many banks and brokers offer a Trading account with online trading facilities. It helps investors to participate in the stock market.

How to Open Demat and Trading account online?

Any individual over 18 years of age can open a Demat and trading account. Here are the steps to open a Demat and trading account:

  1. Fill up the digital form: Visit the broker’s website and fill out the account opening form. Add details such as name, address, PAN, and bank details of the account that is to be linked to the Demat and trading account.
  2. Now upload the documents as mentioned
  3. In-person Verification.
  4. Aadhaar e-Verification

Hence, your account opening procedure is complete and you can begin trading online in the share market.

Stock Brokers in India

  • Sharekhan
  • Zerodha
  • Motilal Oswal
  • HDFC Securities
  • Wisdom Capital
  • Angel Broking
  • 5 Paisa
  • Kotak Securities
  • ICICI Direct
  • India Infoline
  • Religare Online
  • Reliance Securities
  • Aditya Birla Money
  • SBI Capital, etc

What is BSE and NSE?

India has two main stock exchanges – the National Stock Exchange (NSE) and the older Bombay Stock Exchange (BSE).

NSE

The NSE or National Stock Exchange is the leading stock exchange of India. It is the fourth largest in the world (based on equity trading volume). Based in Mumbai and established in 1992, it was the first stock exchange in India to offer a screen-based system for trading.

The NSE was initially set up with an aim to usher in transparency to the Indian market system, and it has ended up delivering on its aim quite well. With the help of the government, the NSE successfully offers services such as trading, clearing as well as the settlement in debt and equities comprising domestic and international investors.

BSE

The BSE or the Bombay Stock Exchange is Asia’s first stock exchange. With a trading speed of 6 microseconds, the BSE is the fastest stock exchange in the world.

Premchand Roychand founded the Native Share and Stock Brokers Association in the 19th century. In those times, it used to function in Dalal Street under a banyan tree – where traders would gather together to buy and sell stocks. Gradually, the network expanded and the exchange was established by the name of Bombay Stock Exchange in 1875.