Stock markets are becoming more comfortable for Indians as the facilities and awareness are increasing. Some individuals want to invest their surplus money and earn profits, while many want to make stock trading their full-time profession. Many students these days are also interested in getting rich by wisely investing their pocket money. Whatever the reason, you compulsorily need a trading and a demat account to start trading and getting opportunities to earn profits.
Let us see how to open a demat account online and if there is any free trading account with a demat account.
How to open a Demat account online
- First, you need to select a broker to create a demat account. Do your research about the fees charged and services provided by various brokers.
- Then go to the selected broker’s website/mobile app and start your registration process.
- For registration, your first step will be to fill the online application and submit it along with your documents for verification. These documents include your PAN card, identity proof such as Aadhar card or Passport, your photograph and a scanned copy of your signature (which should match your signature on the PAN card).
- Once the documents are verified, there will be a KYC (Know Your Customer) process. In this process, you will need to go through an In-Person Verification (IPV) process or eKYC process through Aadhaar number, OTP, and a recorded video with the declaration provided by the broker.
- Meanwhile, you will also need to select your depository where your online demat account is actually opened. You can select either NSDL or CDSL, the two depositories registered in India, for demat services.
- Then you need to digitally sign an agreement with your broker after reading all the terms and conditions.
- Further, you need to mention to the broker about the types of trading you are interested in. It can be Margin trading, Delivery Trading(normal trading as known most commonly), Short sell(Usually recommended for Experts), Intraday(Where buying and selling takes place on the same day), BTST(Buy Today Sell Tomorrow), STBT(Sell Today Buy Tomorrow), Futures and Options, Derivative Trading, Currency Trading, Commodity trading, Crypto trading etc.
- After all these steps, your demat and trading accounts will be successfully opened, and you will receive your DP ID, BO (Beneficiary Owner) ID, login credentials, and other details regarding your accounts.
Before applying for a demat account, you may think about the charges for opening one. So here is the good news, some brokers provide free demat opening service, following the rules laid by the SEBI (Securities and Exchange Board of India), but a free trading account is a myth. SEBI has instructed brokers to provide a free basic demat account, but brokers can charge a minimal amount to open a trading account. The brokerage may be a concern for you, especially if you want to be involved in short-term investing anyway once you start trading; therefore, check for brokerage plans with the broker.
Thus, the process of opening a demat account is quite simple, however you may need some basic knowledge about how the stock markets operate and different types of trading methods before approaching any broker. Further, even when the brokers charge for opening a trading account, that charge is also quite affordable. It is advisable to look at the reliability and other services offered by the broker instead of making a decision based on account opening charges only.