If you want to go out of India, you need to have a passport, visa, airplane tickets and then you have to go through immigration. If you have a passport and visa but don’t have the tickets, would you be able to get on the plane?
Likewise, we cannot go on the portal and directly buy the stocks on a company.
We have to follow certain rules and regulations as directed by SEBI (Securities and Exchange Board of India)
Types of accounts you should have
1) Demat (Dematerialised) account:
It is an account where the shares are stored.
2) Savings account:
It is an account where the money is stored.
3) Trading account:
It is an account through which shares are traded (buy/sell).
a) You can open a Trading and Demat account from any broker and then link your savings account to it. It is the most used type.
b) Nowadays, many banks offer a 3-in-1 account. Charges are a little bit higher in this type.
c) You can have three accounts with three different brokers and bank. You should never use this type.
Documents required for opening Demat Account
1) PAN card
2) Address proof
3) Personalized cheque/Bank statement
4) Passport size photo.
Once all the verification and account opening is done. Your broker will give you an app through which you can trade and then you are good to go.