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Minimum Amount One Needs To Invest In The Indian Share Market?

There is no minimum and maximum limit set to invest in the share market. Just the amount should be decent enough to buy a company’s stock and meet investing costs. You can buy stocks for as low as Rs.10 and the price range can go up to Rs.80,000. A small amount invested now can contribute to your goal of wealth creation in the long run.

Successful investing in the stock market is about managing risk and not avoiding it. If you are in the learning phase to enter the stock market, invest as low as possible that you can afford to lose so that you won’t be affected too much financially due to loss. No one can avoid losses in the stock market completely but losing a small amount would not affect your morale and you will be even more prepared and informed for your next investment. 

Here is the guidepost that will help you to start investing in the stock market. 

Pre-requisites to start investing

A stock market is an online system where financial securities are bought and sold by potential traders. To make investments in the stock market, you need to open a demat and trading account with a SEBI registered stockbroker. 

Investors can buy or sell financial securities online at the stock exchange like BSE and NSE in India. Any person who is willing to invest in the stock market will be needing a demat and trading account which will give them access to all the stock exchanges and market updates.

Demat Account 

Demat account is required to store your financial securities online in electronic form so that these can be held safely, securely and monitored anytime. Whether you invest in mutual funds, stocks, bonds or exchange-traded funds (ETFs), a demat account can hold a number of securities. Online demat accounts fasten the share transfer process. 

  • It keeps financial securities safer from any damage or theft than holding in physical form. 
  • Fast and smooth process to transfer shares. 
  • No paperwork involved in share transfer.
  • It lowers down the cost of investing. 
  • You can access a demat account using smart devices from anywhere.

Demat account opening documents 

You need to submit copies of your PAN card, ID proof, Aadhar number, address proof, income proof bank details, canceled cheque, passport size photo, signature in the digital form to open demat account online.

Trading Account 

A trading account is required to buy or sell securities on the stock exchanges. Soon after the stock market adopted the online system, the investor need not be physically present at the stock exchange to buy securities. Trading accounts is the online platform to trade securities. It is the link between your savings account and your demat account. Whenever you buy securities, the money will be refilled in your trading account through your savings account. 

  • It is one-point access to find multiple stock exchanges like BSE, NSE, MCX etc. 
  • Investors need to make an informed decision to be successful in the stock market. 
  • It facilitates seamless transactions. Investors can keep a track of all your transactions through your trading account. 

These two accounts will make the stock investment convenient for you. You can open a demat account and trading account together with a registered stockbroker. You can choose a discount stock broker to minimize the investing cost.

Investor’s Profile 

Before investing, you need to identify what kind of Investor you are and what is your risk appetite. 

When you open demat account online, you need to tell the stockbroker your investment goals and your risk appetite. You need to determine that you want to make a long-term investment or a short-term investment. And your risk appetite will help to decide on the type of investments from stocks, mutual funds, bonds, exchange-traded funds (ETFs), indices funds etc. 

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