A lot of people often get intimidated when they hear the word, ‘stock market’. And one of the major reasons for the same is the misconception that it requires a lot of money. While the scenario is completely different as the minimum amount to invest in stock market in India is not a massive one.
But why do you need to invest and how is the stock market a better investment option in comparison to others?
So, it is rightly said that the investment of today can be your future tomorrow and therefore it is essential. All the investment options like fixed deposits, real estate, gold, etc are capable of generating returns over a period of time. But with the share market, the returns are better and you can even choose to make money within minutes.
Still, the main question is the money, so let us have a detailed look at the minimum amount required to invest in the stock market.
How Much Money Is Required In Intraday Trading?
Before we talk about investing and learn the Minimum Amount to Invest In Stock Market in India, it is important to note that not just across different segments but there are different trading styles as well.
While some people stay invested in the stock market for the long term, some just look for short-term goals.
All this depends on the financial goals and also the risk appetite of the user.
Intraday tradingusually requires a trader to be on their toes so that they can earn intraday trading profit. Therefore, a lot of people often assume that to earn good, you need to put in a lot of money.
But, as it is essentially said, you can start your trading with as low as ₹1 and just a single stock. Interesting right?
It is important not to start by putting in all your capital in intraday trading. Because in cases where the market functions against the sentiments, heavy losses can irritate the trader.
You can start intraday trading with ₹5000 and then increase the amount once you have learnt and practised enough.
But, what is the right way to use your amount so that you can make the best out of it?
Let us understand this with an example. There are two traders, Anirudh and Ananya. They both thought of trading with ₹100 on the first day. After analysing all the stocks, both of them shortlisted some and added them to their watchlist.
Anirudh purchased one stock for ₹100. So on the same day, the prices of the stock moved and fluctuated to ₹120. Anirudh sold the stock and made a profit of ₹20.
Ananya purchased 10 stocks for ₹10 each. Now the prices of the stocks moved to ₹15 each. Since Ananya purchased 10 stocks, the profit, in this case, is ₹50.
It is clear from the above example that the volume plays a major role rather than the capital while doing short term or intraday trading.
But yes, if you want to trade more and increase the volume then the capital requirement also increases.
As we can see in the above example, both of the traders used the same capital but Ananya was able to benefit more because of the volume.
Now that you know that you can start your stock market investment with ₹100 as well, let us have a look at the minimum amount that you require if you want to invest in the share market.
Minimum Amount to Invest In Stock Market for Long Term
Apart from intraday trading, there are a lot of people who enter the stock market for their long-term goals. It is safe and if done the right way, has the potential to generate great returns.
What is the ideal amount to start investing in the stock market or what is the minimum amount needed?
A lot of people believe that to earn great profits in the stock market, you need a great amount of money but just like in the case of intraday trading, you can start long-term investments with ₹100 as well.
₹100 might seem like a very small amount as people often think that nothing can be bought with such a small amount. But, the share market gives you a chance to invest with a bare minimum of 100 rs as well.
The one crucial thing that you should keep in mind is that you need to invest the amount in a way that the profits or gains that you generate are maximum.
There are a lot of stocks available in the stock market in the range of ₹100 or less. You can choose the right one after proper analysis and invest in the same.
Just like in intraday trading, here also you can invest your ₹100 in more stocks rather than investing in just a single stock.
This will make sure that you get the maximum in the minimum.
Apart from this, you can also invest in SIP (systematic investment plans) wherein you need to deposit only a minimal amount per month and you can get the benefits later.
There are a lot of SIPs available in the market that allow you to start your investment with as low as ₹100.
So, there is no need to worry about the belief that the stock market is only run by billionaires and millionaires.
Now a lot of people are beginners in the share market and often look for opportunities where they can learn first and then make bigger investments in the share market.
So, in this case, it becomes important for an investor to know that, YES! You can invest 1000 rs in the share market.
You can invest across investment options that are available in the market, including equities. It is advisable that you should choose various stocks instead of picking just one.
This not only helps you in increasing your profits but you can also diversify your portfolio and minimize your risk.
There are various stocks that have a price below ₹1000. But as mentioned above, don’t buy just a single stock for that price. You can choose mid-cap and large-cap companies and even small-cap companies if you are looking to invest in volumes.
To sum it up, there is no such rule as the minimum amount to invest in stock market in India. You can start your investment in the share market with whatever amount you have. It is not necessary that you have to have a large sum of money or put all your capital in the share market.
You can begin with small amounts, practice, and then move to higher amounts as well.
If you are looking to start investing in the share market, open your demat account today: