This article will talk about the different steps you need to take to invest in the stock market. You will get to know about brokers, who they are, why they are important in investments in stocks, and how to choose one for you.
BSE Demat Account
When you think about investing your money in stocks, you need to understand the kinds of accounts you would be required to open. The first kind of account is a demat account.
The purpose of this account is to hold stocks and other financial instruments in which the money is invested. In simpler words, a demat account acts like a bank account where stocks are held in an electronic form instead of cash.
The other type of account that you need to know about is the trading account. This account is used for making transactions, i.e. buying and selling securities. It is often a good idea to open both demat as well as trading accounts simultaneously.
You can open a demat account and trading account with any registered broker. Nowadays, brokers have started opening a 2-in -1 account and 3-in-1 account which makes the life of their clients easier.
A 2-in-1 account means demat and a trading account opened simultaneously under one process. A 3-in-1 account includes demat, trading, and banking services. This is even more convenient for clients as depositing and withdrawal of funds become easy.
When you start thinking to open BSE Account, you need to understand that no individual can buy or sell stocks by himself directly. You need to open the demat and trading account with a stockbroker.
A stockbroker is a company that is registered with the regulatory authority of India, SEBI. Individuals or institutions need to open their demat and trading accounts with these registered members.
When you decide to open BSE account, you have to select a broker. As there are different types of brokers here it becomes important to understand your needs.
The first type of brokers is full-service brokers and the other type of brokers are discount brokers.
Full-service brokers provide trading services along with other services like providing advice to their clients on the basis of extensive research done on different companies and stocks.
They also provide portfolio management services to their clients. Since they provide all these services, their charges are more than the charges of discount brokers.
On the other hand, the services of discount brokers are limited to just trading services. They are not into advisory or management services.
Because of their focus just on trading, their charges are way less as compared to full-service brokers.
These brokers basically provide you with a platform where you can go and make trades in your account. In exchange for their service, they charge a fee from all of their clients. This will be discussed at length later.
In general, the full-service stockbroker offers you a 3-in-1 account while the discount broker provides you the 2-in-1 account benefits.
Want to open the Demat Account?
Now to open the Demat Account the foremost task is to choose a stockbroker. In order to make the fair decision, here we are with an overview of the contrasting features of these brokers.
Making a choice of the broker with which you have a BSE open account should be a result of careful consideration and analysis.
We are going to discuss some of the possible criteria on the basis of which we can judge different brokers providing their services in India. Let us check them out one by one –
1. Charges and Brokerages Applicable
Whenever a transaction is done, there are different charges that need to be paid by a client irrespective of the profits or losses he makes on the transactions.
Some of these charges need to be paid to the government and SEBI as taxes. And the other charges need to be paid to the broker through which the transaction has taken place in the form of brokerages.
Examples of taxes to be paid to the government are STT, SEBI charges, etc. The taxes to be paid to the government remain the same with any and every broker.
Brokerages are the charges which actually make a difference. Therefore, it is imperative to look at the brokerages charged by different brokers for trading in different segments like equity, futures, and options, etc.
Other than the brokerages, brokers also charge an account opening as well as maintenance fees. These should also be checked before you open BSE Account.
In general, the full-service charges more fees in comparison to the discount brokers.
Another important factor to consider is the exposure or margins offered by brokers to their clients for trading across different segments. Also, one should confirm the call and trade charges for the brokers.
2. Technology and Tools
This is one of the most important factors of consideration. The quality and user-friendliness of the trading platforms and tools that help in trading make a lot of difference in making a client’s experience of trading good or bad.
The pros and cons of trading platforms of different brokers should be carefully analyzed before making a decision about the BSE open account.
If you do not have much experience in the trade, then it is good to go with the full-service broker as they offer you the trading platform and research advisory that eventually helps you in making a fruitful trading decision.
3. Other Services
Other than the services directly related to trading, some brokers provide additional services like portfolio management and advisory services.
If you are a beginner or think that you would benefit from the advisory and research services of a broker, then, you should have a BSE open account with it.
Research services of good brokers contain a comprehensive fundamental analysis as well as technical analysis.
Fundamental analysis means judging a company’s stock’s worth based on factors like the past performance of the company, its top management, and their plans for the future of the company.
This is done by reading the balance sheets and other financial statements of the companies.
The other kind of analysis is technical analysis. This is done by reading into the previous patterns of price movements and volumes of trading done. Technical charts and technical indicators are the instruments of doing technical analysis of stocks.
4. Customer Care Services
There are some brokers that are very responsive to the queries posed by their clients. They have multiple channels through which their clients can reach them. The reviews of customer care services give a fair idea about this service.
One should do considerable research about the various aspects of each broker. The services and facilities provided by them should be compared with one’s own level of knowledge about the stock market and expectations on opening BSE Account.
How to Open BSE Demat Account?
After ending up your choice the next comes the process to open. Almost every broker nowadays offers both online and offline processes to open the account.
The offline method is the traditional way in which an individual procures the account opening form by visiting the broker’s branch or can also download the form from the website.
On the other hand, the online process can save your time, as you just have to visit the website, click on the link, and complete the steps as directed.
Other than this to open BSE account, you have to keep some important documents handy like PAN Card, Aadhaar Card, Bank Statement, etc.
After completing all the steps an additional step involves the in-person verification which is a mandatory process. The executive of the broker visits the registered address of the client for the verification process.
After the due diligence is complete, the account is finally opened with the broker.
How to Open BSE Account Online?
Here we are going to highlight the overall process involved in opening an account with BSE.
To open the BSE account, first, choose a stockbroker on the basis of various factors discussed above.
Next, visit the website to process the application online.
On the website, click on the link, Open the Account.
It will redirect you to the new page, where you have to enter the basic details, like Name, Mobile Number, Email Address.
An OTP is then sent to your mobile number. Enter it and you will then start filling the application form.
Start with the basic details, and then enter the other information like Aadhaar Card, PAN card number.
Also, you have to enter the bank details (Account number, IFSC Code) with which you want to link your account.
Upload all the documents including your passport size photograph and select the trading segment in which you want to trade.
Choose the plan and make payment.
Click on the Submit button.
Post this, the In-person verification is carried out in which the executive verifies all the details entered by you.
Want to open the Demat Account
BSE Demat Account Login
Once the process of submission of the account opening form is complete with the required documents, a unique password and a client id or a username are assigned to the client.
Using this login information, the clients can access their accounts online and manage them.
All you need is either a desktop, laptop, or even a mobile phone with a good internet connection.
The trading platform of the broker can be downloaded on the device and transactions can be done there.
An obvious thing is not to share this confidential username and password with anyone for security reasons.
It is imperative to log out of the account every time you are done with the account’s work. Also, the password should not be saved on any device.
BSE Demat Account Charges
At the time you open BSE Account, an account opening fee needs to be paid to the broker. There is one other fee that is charged by brokers for the accounts – annual maintenance charge (AMC).
Although most of the broker offers the Free Demat Account i.e. you don’t have to pay any fees while opening an account.
In case there are any charges, it usually varies from broker to broker.
Along with this, there are DP charges, that are not mentioned on the contract. These charges are applicable whenever you sell shares held in your Demat Account.
It is good to know each type of charge and the minimum margin money to keep in the account.
BSE Account Benefits
Opening the BSE account offers you many benefits. Some of them are:
The best benefit of opening BSE Account is that it allows you to trade in equities, future and option contracts in stocks, commodities, and currencies.
One can also invest in mutual funds through a broker.
Also, there are some other options of investment like government bonds and other debt-related financial instruments that come along as you open BSE
BSE Account Disadvantages
Along with the advantages, there are many disadvantages too. Here we will highlight the drawbacks associated with the account opening with the BSE.
In today’s world, most of the broker provides a completely online process to invest and trade in the stock market. This makes it a little challenging for the traders who are not so tech-savvy.
When opening the Demat Account, it is not completely free. You have to pay the AMC charges yearly, even if there is a single stock in your Demat Account.
Also, an opening an account with any broker offers you the trading platform that are not available for free, thus to know the right investment strategy you need to pay the additional charges to your respective broker.
In order to get a decent return on your investment, it is imperative to think about a little riskier and more return generating methods of investments like stocks.
In order to enter this world of stocks and other financial instruments, you need to open a BSE account with any registered broker. The process is easy and does not take much time or money to open an account.
Before making a decision about a broker, one needs to analyze different aspects of the trading account of each broker and the features available at their platforms and mobile phone applications.
After this, investment decisions should be taken based on many factors like your risk appetite, income group, financial obligations to come in the next few months or years, etc. Stay educated, stay invested!