The Complete Beginner’s Guide to Start Investing in Stocks in India

Before any investment decision you make, it is necessary that you gain adequate knowledge about the instrument. Investing in stocks or shares is no different. You need to have knowledge of the basic operating of the share market, the reward prospect, the risk and last but not the least you need to identify your risk appetite which will guide your future actions on this market.

Once you have gone through the above and finally are ready to invest or trade in shares, you need to do the following:

Find a Broker

Identify a good broker you want to work with (your broker do not help you grow your money, so choose a broker that offers you the lowest brokerage and an easy to use trading platform). You cannot directly buy or sell shares on a stock exchange*, you need a broker for the same. There are so many brokers operating in the market. To choose one suitable to you, take help of your financial advisor and friends who are already trading in stocks. You can further check on the internet for confirmation.


Open Demat & Trading account

Open Demat and trading account with a depository* through the broker. Opening an account online takes minimum time and is hassle-free. To open a demat* and a trading account in India you need your PAN, an address proof (Aadhaar), an active bank account (preferably with online banking facility). You need to pay a nominal account opening charge and an annual maintenance charge (which you will need to pay every year). These charges vary from broker to broker.

In this process your KYC is also done. For Aadhaar OTP based online KYC which can be done hassle-free during the online account opening process you need to have your mobile number or email connected with your Aadhaar.


Get a feel of the online trading portal

Once your KYC is done and above accounts are created, you will be provided with online login details on your email to login to your trading console.

After you have got the details, login to the portal provided by your broker and start by creating a watchlist of funds that you want to track and invest in. Get a feel of the portal – check all other options provided in the portal.


Transfer funds to your trading account

Now, to start buying stocks you need to transfer the amount you want to invest, to the broker’s account from your registered bank account. (The bank account you have registered while opening the account with the broker will show up automatically when you will be adding funds)


Place order to buy shares

After the amount is credited to your trading account you can start buying shares.

For buying a share, you can go to your watchlist select a stock and proceed with placing the buy order. While placing an order, you need to take extra care to check the correctness of the name of the stock you want to buy, the quantity you want to buy, the price at which you want to buy and most importantly whether you are placing an intra-day order or a delivery order (in the trading portal or console the denoted names for these order types vary with the broker. Please check before selecting any one). 


Keep a track of your investment

After you have placed the order it gets executed when your order price matches the market price and sellers are available to sell the quantity of shares you want to buy (this process is fully automated and you need to do nothing).

Once you have got the shares you need to keep track of your investment regularly to check for any price movements that may affect your investment goal and before taking any further action it is always better to talk to your advisor once and take decision.


*Terms to know

Stock Exchange:

A Stock Exchange is a platform where stock, derivatives and other financial instruments are traded (bought and sold). Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Both exchanges follow the same trading mechanism, trading hours, settlement process, etc. Almost all the significant firms of India are listed on both the exchanges.

Demat Account:

A Demat account (short for Dematerialized account) is an account to hold your shares or other financial securities (equity or debt) in electronic form. In India Demat accounts are maintained by two depository organisations, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).


A Depository is a link between the companies listed in the stock exchange and you. It helps you buy shares in a paperless manner (by maintaining demat accounts). They issue shares through a depository participant (DP) (banks / financial institutions / brokers) which is responsible for the final transfer of shares.

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