India is the fifth largest economy in the world, and very soon, it will be the third in the ranking list. The above-mentioned stats throw light on India’s growing GDP and GDP/Capital. In short, people are financially stable and are investing their money in real estate, mutual funds, gold, and others. But if you are looking for the smartest way to invest your earned money, you must go with stocks.
Being an investor, you must be familiar with two common terms in the stock market, i.e., Equity and Debt. In equity, only shares are sold and purchased, whereas in debt, bonds and government securities are traded. So, if you are interested in stock shares and scratching your head for the answer to How to buy shares online, then this article is for you.
Step By Step Process For How To Buy Shares Online
Share is the best way to invest in the company as it gives you a unit of ownership. Moreover, the return is quite good, and as per the report, the average return per cent is nearly 16% (applicable for long-term investment). But you can’t buy the shares directly from the stock market, and at this point, you will need the assistance of stock brokers as they are registered members of stock exchanges.
In the stock market, you will find various types of shares, such as Authorized Share Capital, Issued Share Capital, Right Shares, Bonus Shares, and many more. If you are not familiar with these terms, then don’t worry, as a stockbroker is there for you who will invest in the companies on your behalf.
Now, let’s see the detailed method to share trading online as it will help you to practically analyze the real stock market and to earn more money through this platform.
Get Ready With Pan Card
PAN Card (Permanent Account Number) is a very important document required in financial institutions, including the Stock Market. The card is issued by the Government of India, and in the same, ten-digit alphanumeric numbers are embedded, which are unique. In the stock market, you must have a Dematerialized Account (Demat) and a Trading Account, and without a PAN card, these two accounts can’t be created.
Knock The Door Of The Depository Participant To Open The Demat Account
If you are looking for the answer to how to purchase shares online, then the first thing you need is the Demat Account. But before that, you must understand depositors or DP in the stock market, as they are the firm or agency that acts as a medium between NSDL and CDSL. They both are depositories and retain the shares in electronic form. NSDL is known as National Securities Depository Limited, and CDSL means Central Depositories Securities Limited.
Depository Participants can be financial institutions registered with SEBI, brokers, and banks. So, to open the Demat Account, you can move to any agency online as per your choice and provide all the essential documents. Once the verification process is done, you will get the Demat Account. Once the account is opened, you will get a Demat Account Number, and this number is the pivotal element in holding the share in the stock market.
Open Trading Account Online In No Time
Demat Account retains the shares in electronic form, but to trade the same in the stock market, you will need a trading account. Such an account can be opened by the financial institutions registered by SEBI, and you just need to provide Bank Details, ID proof, and other documents. Once the trading account is opened, you can freely buy or sell shares in the stock market.
Hunt for a Stockbroker
If you are looking for an effective result of how to invest in stocks online, a stockbroker is needed. So, being an investor, your prime focus must be hunting for a broker. First and foremost, ensure that the broker or brokerage firm is registered with SEBI. Next, you need to look out for the stocks in which they are registered. Once your research part is done, complete the agreement deal between you and the broker.
Look for a Unique Identification Number
Unique Identification Number (UIN) is made compulsory by the SEBI as it enables the agency to maintain the sheet of investors and stock brokers. So, to get the same, you will have to knock on the door of the National Securities Depository Limited, i.e., NSDL.
Conclusion
The above-mentioned process can be done online as various DP (Depository Participants) are available online, and even NSDL is there. So, you don’t have to worry at all; just focus on three essential elements, i.e., Opening a Demat Account, Trading Account, and UIN. Once you have them, your query for how to buy and sell shares online can be easily figured out. The reason is you can directly peer into the stock market and trade the shares followed by the ways described above.
