What is a Trading Account?
A trading account is a type of online account for trading equity shares. Also, investors have to own these trading accounts with a registered online stockbroker to make a trade where the broker makes the best for the customer in the stock exchange using the best trading account.
When the stockbroking world didn’t use the software-based tools and the share market executed the buying and selling of stocks manually. The investors and traders were required to make their bets and orders in the stock exchange verbally in a process called open outcry. Some different signals and gestures signified different meanings in the stock market and orders were granted based on these signals. It was a manual system for trading and investors could make their orders by themselves. However, with the online stock market, the procedure of selling and buying stocks has changed.
Some of the best trading account in India are used to make trade online. The best trading account is also a link between the Demat account and the bank account of a trader. The best trading account in India has the trading ID which is used to make each trade and this ID identifies the individual trader. Funds and shares are stored electronically in the trading account and are transferred through a trading account.
Introduction of Best Trading account in India
The system of stockbroking has been around for many years and big corporations as well as individual investors have been trading and investing in the stock market for the long-term and short term. Although the stockbroking business works on similar principles, and the mechanism of the stockbroking has changed over the years that transformed the online share market trade completely.
One such change came into the stock market when the online trading platform was introduced and it was regulated that all trades must be executed through an online medium using electronic funds. This change was much awaited and was due to the technological advancements and adaptation of technology into the stockbroking world. Also, with all trade being online and in an electronic form, the tracking of these transactions was easier, therefore, helped maintain a healthy trading environment.
Initially, there were only a few companies registered at the Indian stock exchanges, but today there are thousands of companies including big and small. These companies make their stocks and shares available in the stock market for investors to invest in. Now, with the online working of the stock market, a trading account is necessary for carrying out operations such as buying and selling of stocks in the stock market.
How Does Trading Account Work
The trading account that can permanently connect the bank account and the demat account in India is the finest one to use. The trading account is the online trading platform utilised for stock market trading, as was previously explained. However, purchasing and selling equities on the stock market is not a straightforward operation.
There are other variables such as the Demat account which is the dematerialized form of account where shares and stocks are stored and transferred in an electronic format. The other is a bank account from which a certain sum of money is either credited or debited depending on the type of trade. The best trading account, therefore, is the platform that gets the shares and stocks from the stock market, and then these stocks are transferred to the Demat account of the investor.
The working of a trading account is as follows.
Suppose you buy 100 shares of a company, then those 100 shares would be transferred to your Demat account through the trading account and the amount of money you need to pay for those 100 shares will be debited from your bank account through the trading account. Similarly, if you sell 100 shares of a company then those 100 shares are taken from your Demat account ( where they are stored electronically) and the sum of money for those 100 shares is credited into your bank account based on the selling price of those 100 shares.
Steps to Open Trading Account
best Trading Account In India, there are thousands of registered stockbrokers to execute online trades on the behalf of an investor and trader. However, the procedure to open the best trading account in India is a bit different from opening a bank account. Since there are many customers making trades through stockbrokers, it gets difficult for brokers to handle each transaction and give customers full support. But with a trading account, the job of a broker is much easier and operational. As mentioned, there are thousands of online brokers meaning there are thousands of options for choosing the best trading account in India. Follow the below-mentioned steps to open a trading account in India:
- The first step for opening the best trading account is to select an online broker who offers trading account services.
- The opening of a trading account is mostly free of cost, but this entirely depends on the particular stockbroker. Therefore, the decision should be made after evaluating features and services considering the opening charges and maintenance charges of the trading account.
- After you have chosen the perfect online broker for the best trading account services, visit the official website of that broker and fill out the sign-up form duly to open a trading account. Else, simply call on the given toll-free number on the website to know more about the opening details of the trading account.
- The applicant is likely to get an instant reply to the request mail or a sales representative will contact you with all details and requirements for the opening process of the trading account.
- You can follow the steps which vary from broker to broker. It usually requires submitting carefully filled KYC and other forms along with two coloured photographs.
- The trading account is handed over to the customer once the verification process is completed and the trading account details with credentials are given to the customer immediately.
By following the above-mentioned steps, you can get the best trading account in India. The most important thing in the whole procedure is to choose an online broker wisely who can execute your trades in the stock market as well as gives you a reasonable and affordable deal over the best trading account.
Documents and papers Requirements:
The above stepwise guide is a summary of the overall process for opening the best trading account in India. But there are specific rules and guidelines which must be followed to ensure that there is no issue or error. One such important part of the process is the requirement of some specific documents and papers which are listed down below.
Income Proof:– To show a valid income source is mandatory for regulating any trade in the stock market. This can be proved by submitting any of the following documents:
- A tax filing report of the Income Tax Return (IRT).
- A document showing the annual income summary which is certified by a valid Chartered Accountant.
- A salary receipt of the trader from his/her place of employment.
- A declaration of all the property owners and other assets.
Identity Proof:- It is mandatory to certify that the trader is registered and is an Indian citizen with a legal identification proof. The applicant can submit any of these documents for the completion of the identification process.
- Government-issued PAN Card, Adhaar Card, Passport, Voter card, driving license.
- Any type of identity card which certifies the identity of a person and has some type of photograph attached. The card has to belong to a public sector organization or government body.
Address Proof:– A document that verifies the permanent address or place of residence. The applicant can submit any of these documents for the completion of the identification process.
- Ration card, insurance copy, driving license, passport, or tenant slip.
- Any kind of government-issued bill such as electricity, telephone, or gas bill not more than 3 months old.
- Any type of bank statement that verifies the address of a person.
Advantages of Trading Account
- Multiple Reaches – With a single trading account most of the Indian stock exchanges can be accessed like the NSE and BSE. The best trading account in India is the one that gives reach and access to trading in multiple segments like equity, derivatives, and currency in all stock exchanges. Choosing the best trading account gives you the advantage of making trade in the stock changes from a single trading account. Some of the best trading accounts make you trade in all the Indian stock exchanges using one trading account. This is one of the biggest advantages of having a trading account.
- Customer Support – Although the mechanism of the best trading account is pretty simple and can be operated easily. Still, most online stockbrokers offer amazing customer support for traders in operating trading accounts if they face any difficulty at any given point. Some of the best trading account in India give SMS and email services to customers consisting of details of the selling and buying of stocks. Also, having a backup facility that can help manage your trading account gives mental peace and security in case there is any transaction error because transaction faults can cause many issues.
- Easy Access – Now when the online brokers have launched their mobile applications, the best trading accounts can also be managed through those applications. These mobile apps also help track your stock trade of the trading account. Also, with the trading accounts, you can get access to many software-based trading platforms that give many other trading facilities other than just trading.
- Fund Transfer – Using the best trading account in India, stocks, and shares can be transferred to the Demat account as well as money transferred to the bank account using the trading account with maximum security and insurance. The better the trading account, the better are the facilities of the trading account like fund transfer.
Know the Difference – Trading account Vs. Demat account
Often traders get confused between the best trading account and the Demat account. It is assumed that the function of both of these accounts is the same. But a trading account is quite different from a demat account.
The best trading account in India is used to trade in the stock market for buying and selling purposes while a demat account is used to store electronic forms of funds, shares, stocks, and money.
As the functionality of these accounts, a trading account functions to buy and make a trade in the stock market while the storage of the shares and stocks are not the role of a trading account. The Demat account on the other hand functions as a storage house to hold electronic stocks. Also, both the accounts workspace is different. However, both of these accounts are offered by stockbrokers on minimal charges and are available through online mediums.
When the nature of these two accounts is compared, the trading account highlights all the transaction details. It contains all the transaction summary of stocks and shares as well as the funds. The demat account tells you the details of all the existing stocks and shares that the customer holds in their account.
The difference between these accounts can also be explained with their different set of roles. A Demat account is just a depository to keep the online stocks safe and secure so that they can be used when needed for buying/selling.
A trading account doesn’t hold anything but it is a platform to regulate online trading for buying and selling. A major difference between a trading account and demat account is that the trading account functions as a link to connect the demat account and the bank account.
Top 5 Best Trading Account in India
After having an overview of what is trading account, how does trading account works, the steps to open a trading account, and the benefits of a trading account, here we let you know the best trading account in India? Below are the 5 top stock brokers with the best trading account in India.
Wisdom Capital is one of the best online discount brokers in India with various features to trade in the stock market. One such popular service by the broker is in the best trading account. Trading account with Wisdom Capital can be opened free of cost with maintenance services. Customers with PRO and Ultimate plan get extra benefits while the basic procedure for the regular customer is also quite simple and standard. PAN Card, address proof, bank statement, and income proof are the only documents necessary for the trading account.
Zerodha is the number one discount broker who gave India the concept of discount broking. Delivery with Zerodha is entirely free and there is no minimum margin brokerage. Trading account services are highly rated among customers and trading using Zerodha account is highly recommended. The account opening charges of the trading account with Zerodha is Rs. 200 backed with multiple hi-tech trading platforms.
Upstox is known for its cheap brokerage charges with valuable services in the best trading account. The opening of the trading account with Upstox is free of cost which gives a zero brokerage fee for the first 30 days. Another important feature of Upstox is the instant and quality account opening procedure. Once you file a request for best trading account services you get a reply from the broker within 24 hours and the account is handed over soon after the verification. Trading platforms access is also granted with the facility of a trading account.
This discount broker claims to have the cheapest brokerage charges with Rs. 10/trade while there is no adjustment in trading account services. The best trading account is offered by 5Paisa with zero account opening fee. In the pack with 5Paisa, Research & Idea pack the maintenance charges for the trading account are only calculated for the traded month and not the rest. Trading platforms by 5Paisa are several namely Trade station web, EXE. Trade Terminal along with the 5Paisa mobile app which can be used to operate the trading account.
Among the leading full-service brokers in India, Sharekhan is rated as one of the highest in terms of best trading account services. It is assumed that the opening charges or the maintenance fee for the trading account may be high but on the contrary, the opening charges for trading accounts with the broker are zero which makes it extremely exciting. However, the annual maintenance charges for the best trading account are free for the first year and then nearly Rs. 400 for each year after that. There are workshops available for investors and traders to help learn the trading methods with Sharekhan using the best trading account.
Conclusion on Best Trading Account in India
Online trading changed the entire stockbroking network from online transactions to share trading in the stock exchange. Another important alteration was in the way online brokers helped investors in executing orders using the best trading account. Trading account services are therefore a widely available service for all types of investors and traders by both full service and discount brokers so that online shares and stocks could be conserved. Also, trading accounts are the only link between Demat and Bank accounts.