Why a brokerage account?
In order to be able to start trading on the stock exchange, investors need a trading account. Once up and running, they are able to buy and sell stocks, futures, options, mutual funds and other securities.
In this way, investors can increase their capital more than by keeping it in traditional savings accounts. Be aware though that investing is also comes with risks.
Bank, Demat and Trading Account:
Individuals will need all three of the above in orderto be able to trade. Brokers usually offer a demat and trading account which investors can link with their current/savings account. The demat account is where investors can store the shares and the securities purchased. The trading account is to keep the money needed to buy and sell the equities. Both are linked to a bank account for the transfer of funds.
Full service vs Discount Broker
In India, somebody can find these two types of brokers depending on their pricing strategy. Normally, a discount/low priced broker has a low commission on brokerage but lacks customer service quality.
On the other hand, a full-service broker offers better services and gives access to more markets and financial products. The commissions applied are higher. It’s up to you to determine what kind of broker to choose, weighing up all the pros and cons including costs, quality of services and other features provided.
How to open an account?
Opening an account is done at the broker’s agency or totally online. All brokers presented on this website have an online application for opening an account. Choosing an online broker saves time and costs and enables all investment activities to be done online.
Click on the button: ‘open an account’, found on each broker’s review page and get redirected to the firm’s site. There, you will be asked to fill in some forms with some personal info and attach some documents like your id and proof of address. Then, the broker will process this information. After a few hours or a few days, your trading account will be opened and you will be able to start trading on the stock exchanges. What is important is to compare the brokers and find the offer that best fits your profile.
What does it cost?
All brokers charge a brokerage fee which is a commission on your investments and is charged per order. Some brokers ask for a flat fee per order and others for a percentage on the amount to be invested. Investments in different securities have different brokerage costs. This website shows costs on intraday trading and equity delivery. The analytical pricing of each security offered can be found on the website of the relevant broker.
Another fee applied, is the cost of opening the account. This will be charged once at the beginning. Discount brokers usually charge lower fees for this. Most brokers also charge a fixed annual account maintenance fee. Taxes and other various small charges are applied on trading accounts.
This site gives the main charges per broker. For a more detailed examination of prices, you should check the documentation on the broker’s website.
