How Can I invest in the stock market in India?
Know how to invest in the stock market in India and get the information about the required documents for investment.
The stock market may look like a tricky business with a plethora of assets to trade, thousands of jargons, and the inevitable volatility. But the good news is, its not complicated as you might think. And getting started just take s a few steps. In this article, we will point out the exact steps you need to take to start trading in the Indian stock market. But first, let us know it a little.
Indian Stock Markets
The Indian stock market mainly comprises 2 national exchanges: BSE, and NSE from where all the trading takes place. Public companies get registered on these exchanges who in turn are affiliated with hundreds of stock brokers at your level, to make the trading accessible and user-friendly. As far as stocks are concerned, they are grouped into two main indices Sensex, comprising of 50 stocks, and Nifty 30. The market behavior mainly depends upon these indices.
That’s it for the basic theory. Let's move onto to know if YOU can invest in the stock markets. What are the criteria?
Who can Invest in the Stock Market?
There is no strict eligibility to invest in the stock market, of course! How else are 18 million people trading actively in India? However, there are certain things to keep in mind. First being, you need to be 18 or above to open a Demat and Trading account in India. Its a necessity to start trading.
Secondly, your educational qualification plays absolutely no role in the process. You could be a student, or a businessman and would be treated equally in the stock market.
The last and third point being the geographical flexibility we have for trading in the Indian Stock market.
According to the Portfolio Investment Scheme (PIS), Non Resident Indian (NRIs), Foreign Institutional Investors (FIIs), Persons on Indian Origin (PIOs), and Qualified Foreign Investors (QFIs) can invest in Indian stocks and debentures.
Investing in the Indian Stock Markets: Getting Started
Step 1: Choose a Stockbroker
It is mandatory to select a stock broker. Direct trading is not permitted in the Indian stock markets. While choosing a stock broker, compare different types available: discount and full-service and also compare the brokerage charged by them, services offered and trading platforms they provide. As an Indian investor you have a plethora of options to choose from.
Step 2: Open a Demat Account
Opening a Demat (trading) account is essential to start trading in the Indian share market. To have this account there are certain other documents that you must have are: PAN card, Aadhar card, Bank account details and a recent passport-sized picture. While Demat account acts as a place to store your securities electronically, a trading account is required to place buying and selling orders in the stock market.
Once you create this share holding account with a stockbroker, they will take care of the way forward from there. From suggesting you the top stocks to offering researched analysis of companies, the job of a stock broker is to make your entire trading experience hassle-free.
Step 3: There isn't any! You can get started trading today!