In recent years, retail investors have evinced interest in the Indian stock market thanks to its stellar performance. However, many of them have been intrigued by how to buy stocks online.
Actually, the process is simple if you follow certain logical steps and go about the process diligently. This blog post will handhold you through the investment journey.
Which are the best stock exchanges?
When it comes to India, the best platforms to buy stocks are the two leading stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Both are known for their high levels of liquidity, trading volume, and market capitalization.
The National Stock Exchange (NSE) is the largest in India in terms of trading volume and market capitalization. It offers a wide range of products and services such as equity, derivatives, currency derivatives, and debt securities.
The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and the first stock exchange in India. It offers various products and services, such as equity, derivatives, mutual funds, and debt securities.
Both exchanges have a good reputation for transparent, efficient, and fair trading practices.
How to buy stocks using a direct purchase plan?
Research the direct stock purchase plan (DSPP) made available by the business you are interested in investing in. Send a completed registration form and your first contribution straight to the firm or its transfer agent to acquire shares via the direct purchase plan. Certain programs call for continuous investments to be made automatically.
Things to do before buying stocks online
The Indian markets have seen a significant increase in the volume of online trading activity. The preceding stages are crucial to understanding how to buy stocks online.
Open your trading and demat account
You need a trading account and a demat account to participate in equities trading. The demat account delivers shares, while the internet trading account is used to execute deals. Your identity papers, a recent utility bill indicating your current address, a canceled cheque leaf, and your Permanent Account Number (PAN) card are all you need to open an account. After setting up your account and changing your password, you may begin trading online.
Choose your online broker carefully
Choosing an internet broker is the first step in purchasing stocks electronically. Choose between discount and full-service brokers based on whether you just need someone to execute your transactions or if you also want access to research and stock recommendations. Before selecting a broker, it is prudent to inquire about the support services they provide and whether they have secondary order-placing capabilities, such as call-n-trade.
Next step is to fund your account
If you wish to acquire stocks for real-time trading, short-term delivery, or long-term holding, you must first fund your trading account. You may add money to the account using any of the three available options: NEFT, IMPS, or UPI. Once your online broker account has sufficient funds, you can make orders.
Register with a broker/brokerage platform
The Securities and Exchange Board of India (SEBI) governs who may serve as an investor’s broker or brokering platform. With the aid of a broker, you must create demat and trading accounts to acquire stocks via an online brokerage.
Select the price and select the right type of order
Using online technical charts, you can identify the optimal time to purchase a stock or where to put stop loss before placing an order. Bag the best bargain possible. Be aware of the sequence you use.
Getting a PAN card
Online stock transactions need a Permanent Account Number (PAN). The Indian government issues each citizen a unique alphanumeric identification number (having 10 digits). You can perform financial activities in India only if you have a PAN card.
Conclusion
Buying stocks online is a relatively simple process that allows individuals to invest in the stock market with ease. You will need to open a brokerage account and fund it, research the stocks you are interested in, place an order to buy the stocks, and monitor your investments. It’s also important to consult a financial advisor and understand the risks before making any investment decisions. Above all, stay informed about the company and the broader market before making any investment decision.
FAQs
How do I buy stocks for the first time?
To buy stocks for the first time, open a brokerage account, fund it, research the stocks, choose a stock, and place an order.
How do beginners buy stocks in India?
You will need to open a demat and trading account with a broker. You can open the account online and submit the required documents. Once your account is activated, fund it and place an order to buy stocks. It is important to research the stocks and consult a financial advisor before making any investment decisions.
Can I buy stock directly without a broker?
Yes, it’s possible to buy stocks directly without a broker through direct stock purchase plans (DSPPs) offered by some companies. DSPPs have lower costs and minimal fees but may have certain restrictions, such as minimum investment amount. It’s important to research and understand the plan’s terms before signing up. Not all publicly traded companies offer DSPPs, so you may still need a broker for some stocks.
How do I start buying shares online?
To start buying shares online, follow these steps: Obtain a PAN, open a DEMAT and Trading Account, choose a broker, link your bank account, and place orders.
How do I buy stocks for the first time?
To buy stocks for the first time: Open a brokerage account, decide on stocks, determine the quantity, choose an order type, and place the order online.
How can I buy shares on my own?
To buy shares on your own, open a brokerage account, connect it with your bank, choose stocks, decide the quantity, and place orders through the brokerage platform.
