How to Open a Trading Account?

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Financial markets have undergone a transformation since the start of the century. Open outcry form of trading gave way to electronic trading that paved an era of transparency. With improving transparency, institutions, both foreign and domestic, started their operations in India. This resulted in new investors coming to the market. 

Presently, online trading has become a rage among the young with most brokers offering an online method of opening trading accounts. 

Why Do You Need a Trading Account? 

A trading account is necessary for every trader to take part in the stock market activities to buy and sell shares, securities, commodities, and any financial underlying asset. Without having a trading account, neither you nor the broker on your behalf can facilitate the trade. 

List Of Documents Required to Open a Trading Account

Before you dive into opening a trading account, there are certain documents that you should have with you. Although the process of opening a trading account is almost the same with every DP/depository participant, submitting these documents is mandatory for all the traders.

Income Proof

• Income Tax Return or ITR copy
• Net worth copy or annual statement of accounts copy attested by a CA
• Form 16 or current month’s salary slip
• Last 6 months bank statement

Identity Proof

• PAN card followed by a proper photo
• Aadhaar card, Voter ID card, Driving license, and Passport (Present any one of these)
• ID cards with one valid photo issued by the Central/State government
• You are allowed to present ID cards provided by professional regulatory bodies like ICAI, ICWAI, or ICSI Credit/ Debit cards, banks, PSUs, commercial banks, statutory bodies, etc.

Address Proof

• Ration card, Voter ID, Passport, Insurance document, House maintenance bill, and Telephone bill (Submit any one of these copies as address proof)
• Electricity bill or Gas bill not older than 3 months
• Bank passbook copy not older than 3 months
• New house or flat address signed and attested by High court or Supreme court
• Address proof furnished by any of the statutory bodies, namely, Scheduled Commercial Banks, Scheduled Co-Operative Bank, Multinational Foreign Banks, Gazette Officer, Notary public, Member of Legislative Assembly, and Member of Parliament.
• ID cards furnished by universities/colleges, professional bodies like ICAI, ICWAI, ICSI, Bar Council.

How To Open a Trading Account?

To incorporate your trading knowledge, you have to go live first. For that, you have to open a trading and Premium Account online or offline by visiting or associating with a depository participant cum stockbroking firm. TradeSmart Online, a leading discount brokerage firm, offers both trading and Premium Account services. You can go paperless by opening your online trading account with TradeSmart.

Step 1: Find an Appropriate Stockbroker 

The first and foremost thing you have to do is find a proper stockbroker that fits all your trading needs. Check with the broker whether they offer all the necessary trading services demanded by you. Always keep in mind that time is money in the trading business. So, make sure the broker’s trading platform can be easily accessible both via website and app if they have one.

Step 2: Check The Differences 

Once you find the right stockbroker, check out the brokerage rates they are offering and compare them with other firms. Each stockbroking company has brokerage rates and processing charges. So, before deciding to open a trading account with any stockbroking company/firm, ask all the necessary information related to the trading account opening charges, followed by other fees details, if any.

Step 3: Fill All The Details

After finalizing the stockbroker, fill the forms of trading account, Premium Account , and KYC. If you are opening a trading account online, here’s the procedure to fill the form. 

• Go to the application page
• Enter your name, PAN details, contact number, email ID, house address, bank account details, etc.
• Upload all the necessary documents like income proof, address proof, bank copy, canceled cheque, ID proof, and photographs.
• Record a small video of yourself and upload the same for self-identity verification
• In the end, e-sign the document and finish filling the form

Step 4: Final Check

Upon finishing the form filing, your data will be crosschecked by the stockbroker. As and when the details and the documents are verified, you’ll receive your trading and Premium Account login credentials. Now, you are ready to start trading. However, before you plan to buy any share in the market, deploy some amount from the bank account to the trading account. You can glance at the live market, make a watchlist, purchase shares of the top companies, and a lot more. 

Step 5: Power of Attorney

It’s like a personal bank account, where the customer gives the banker the limited power to change as per their instructions. POA or Power of Attorney is just the same. Here, the stockbroker is given limited authority over the trader’s account. Prior to that, you have to fill the POA given by the stockbroker to give basic access to your trading account. By doing so, the stockbroker transfers the shares to and from your trading account after every sale and purchase made. In simple words, POA allows stockbrokers to debit or credit the shares from your trading account whenever the trade transaction is made.

Key Takeaway

Every person who wants to trade in the stock market should open a trading account. Before leaping into finalizing the account opening decision, you have to find and choose the right stockbroking firm. They should be able to offer all sorts of trading services inquired by the trader. 

Besides, you should also check and compare the brokerage rates and other fees of one stockbroking firm with another. If you feel gratified about the services, you can come to a conclusion as to whether to open a trading and Premium Account with that firm or not. TraderSmart Online is one of the leading stockbroking firms that provide trading and Premium Account services at the best rates. You are just a tap away to create a trading account with them and enjoy the unceasing services.