What is a Trading Account?
Much like a Demat account, a trading account is also vital for investing in the share market. It allows you to electronically buy or sell shares and other securities in the stock market. Back when physical share certificates still existed, the stock exchanges used an open outcry system. According to this method, traders who wished to buy or sell shares had to be physically present in the stock exchanges and had to verbally communicate with the other parties. However, ever since the stock market went completely electronic, the open outcry system has been replaced entirely by online trading accounts.
Having an Online Trading Account in India
With an online trading account, you do not need to be physically present in the stock exchanges to place buy or sell orders. You can simply use your trading account from anywhere in the world to buy or sell shares. This has not only simplified the entire share trading process, but it has also facilitated extremely quick settlements and deliveries.
You can open a trading account only through a registered stockbroker like India Infoline, which acts as an intermediary between you and the stock exchanges. A unique user ID is mapped to every trading account, and each account is protected by a password for additional security. The difference between a trading account and a Demat account is that the former is used to buy or sell shares and securities, while the latter is used to hold the shares and securities purchased.
Fun Facts about Online Trading and Trading Accounts
Online trading is serious business; there’s no doubt about that. However, some facts and statistics about this practice are downright fascinating. And with online trading now ruling the stock markets, here are some facts about share trading and trading accounts that you’ll find interesting.
- In January 2020 alone, the percentage of non-algorithmic trading in the cash market was 24.80 while the percentage of algorithmic trading was 13.01.
- Mobile-based trading comprised 18.51% of all trades in the cash market in January 2020, while internet-based trading came in at 11.29%.
- The number of trades grew from 2,237 lakhs in December 2019 to 2,605 lakhs in January 2020.
- In January last year, the quantity of shares traded stood at 2,67,820 lakhs. By January this year, this grew by around 75% to 4,71,101 lakhs.
- The number of clients registered as trading in equities stood at over 62 lakhs as on January 31, 2020.
With a trading account, you too can trade in equities and other financial assets regularly. In addition to this, there are other reasons to open a trading account as well.
Why Do You Need a Trading Account?
In addition to the fact that a trading account is mandatory to buy and sell shares in our country, here are some other reasons why you need a trading account in India.
Access to Multiple Stock Exchanges:
An online trading account allows you to trade in multiple stock exchanges simultaneously. This was impossible during the initial days of the stock market, when all the shares and scrips were held physically. Also, you get to enjoy access to all the leading stock exchanges in India such as Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Multi Commodity Exchange (MCX), and National Commodity and Derivatives Exchange (NCDEX). What’s even more interesting is that you can access all of these exchanges via a single platform.
Access to Financial and Research Reports:
Online trading accounts offered by leading full-service stockbrokers like India Infoline provide valuable information on the stock market. With an online trading account, you can gain access to all the latest news, financials, and research reports of almost every listed company. These reports not only enable you to make informed trading decisions, but they can also assist you in fulfilling your financial goals within the right time frame.
An online trading account offers unmatched levels of convenience. Trading solutions offered by new-age platforms like India Infoline come with a dedicated smartphone application. This enables you to access the stock market from anywhere in the world and at any point in time. All you need is a smartphone or a handheld device to keep track of your investments and buy or sell shares conveniently.
With an online trading account backing your trades, you can smoothly and seamlessly conduct all of your stock market transactions. Right from fund transfers and placing orders to taking deliveries and monitoring your portfolio, trading accounts make every aspect of share trading systematic and hassle-free.
Customizable Trading Experience:
Since an online trading account is powered by state-of-the-art technologies, it gives you complete leeway to customize the experience according to your needs and requirements. Trading accounts allow you to customize your watchlists, modify your orders on-the-go, and even set floating alerts that notify you via SMS and email.
The Trading Account Opening Procedure
With India Infoline, you get to enjoy a hassle-free and smooth trading account opening experience with minimal documentation. IIFL offers both online and offline modes for opening an online trading account. The following step-by-step guide will explain the account opening process in detail.
Step 1: Visit our website at www.indiainfoline.com.
Step 2: Click on the prompt that reads ‘open a trading account’. The website shall redirect you to a new page, where you need to enter all your basic details in the relevant fields.
Step 3: Once you submit those details, you will receive One-Time Passwords (OTPs) on your mobile number and your email ID.
Step 4: Input the OTPs in their relevant fields and verify them.
Step 5: After verification of the OTPs, you will be required to fill in a trading account opening form.
Step 6: Once that is done, one of our Relationship Managers (RM) shall contact you on your phone or your email regarding the documentation requirements.
Step 7: Upon completion of the documentation process and the subsequent receipt of all the signed forms, your online trading account will be made operational within 24 hours.
To open an online trading account via the offline mode, all you have to do is give us a missed call on this number – 08066719101. One of our Relationship Managers will get in touch with you and personally assist you with the account opening process.
Trading Account Fees and Charges
The fees and charges for opening an online trading account with India Infoline are very nominal. IIFL charges Rs.295 trading account opening fee, with absolutely zero Annual Maintenance Charges (AMC) for the first year.
When it comes to brokerage, India Infoline offers one brokerage plan – the Zero Brokerage Plan. Here’s some more information about this plan
|Plan name||Zero Brokerage Plan|
|Minimum Margin||₹ 0|
|Monthly subscription||₹ 0|
|Equity Delivery %||₹ 0|
|Equity Intraday/ Futures (per lot)||₹ 20 or 0.05% whichever is lower|
|Nifty Options (per lot)||₹ 20|
|Stock/ Bank Nifty Options (per lot)||₹ 20|
|Commodity, Currency trading||₹ 20 or 0.05% whichever is lower|
|Currency Options (Per lot)||₹ 20|
|Currency Futures (Per lot)||₹ 20 or 0.05% whichever is lower|
|Commodity Options (Per lot)|
|Crude Oil||₹ 20|
|Gold Mini||₹ 20|
|Access to services|
|Market Guru seminars||No|
|Trader Terminal EXE||No|
|Analyst/ Investment advisor meetings||No|
Selecting the Best Trading Account in India
There are plenty of stockbrokers offering a trading account in India. Choosing the best one among them can quickly get overwhelming. Here are some tips that can help you narrow down on the best trading account in India.
Not all trading accounts offer the same set of investment products. Some may only offer the opportunity to trade in equity and derivatives, while others may also provide other investment options such as debt securities, bonds, mutual funds, and government securities. It is always a good idea to opt for a trading account with a provider that allows you to invest in a wide variety of products. IIFL, for instance, offers you the chance to invest in stocks, IPOs, derivatives, mutual funds, futures, options, currencies, and more.
The stability of the trading platform is something that can either make or break your entire experience. When looking for the best trading account in India, always make it a point to check the track record of the performance of the trading platform. Steer clear of trading platforms that have crashed, glitched, or have been non-responsive consistently. Since your entire investment hinges on the trading platform’s smooth and seamless operation, it is essential that you choose a stable platform.
Another key metric to consider when selecting the best trading account in India is its user interface. The trading platform’s interface should neither be too basic nor too advanced. It should seek to maintain a fine balance between the two. Also, the interface should be user-friendly enough to be easy to read and understand. Never choose a trading account whose interface is confusing or not comfortable for daily use.
When it comes to the financial markets, there’s no guarantee that things will always go as planned. That’s why it is critical to choose a trading account with an exceptional customer support backing it up. Ideally, the support team of a trading account should be responsive, understanding, and provide quality service in the event of a problem with the service.
Share Trading Guide for Beginners
Share trading is a risky affair. Not everyone who trades in the stock market gets to witness success. However, with proper planning and execution, you can certainly realize your financial goals. If you’re a novice when it comes to the practice of share trading, here are some share trading tips that can help you protect your investments and help you earn high returns.
- Keep yourself well-informed about the financial markets and the economic scenario.
- Chart out a trading plan and stick to it.
- Diversify your investment portfolio.
- Keep a strict control over your emotions and do not let personal bias influence your trading decisions.
- Refrain from taking unnecessary risks to get rich quicker.
- Do not use borrowed money to trade.
- Refrain from trading in penny stocks.
- Avoid trading at the start and at the end of the trading day.
- Use stop-loss more often to keep your losses to a minimum.
- Set profit goals that are realistic.
India Infoline Share Trading Platforms & Tools
Having access to the right trading platforms and tools can enhance your trading experience significantly. When you choose a depository participant, ensure that you get to know the platforms they support, so you can make a more informed decision. Without access to convenient trading solutions, your trades can get slow and cumbersome, ultimately resulting in losses.
IIFL offers several next-gen trading platforms that are backed by cutting edge technologies. By opening an online trading account with India Infoline, you get to experience different platforms that support quick and efficient trading on-the-go. Here are some of the platforms and tools we offer.
TTWeb is an internet-based trading platform that operates using your web browser itself. To trade on the share market, you only need to log into the TTWeb platform using your user ID and password. The user interface is clean and clutter-free, making this web-based platform perfect for you when you’re trading from the comfort of your home.
This is a desktop application that you can download on to your PC. By installing the program and running it, you can enter the app’s portal, which gives you access to a convenient interface that you can use to buy or sell financial assets. The advantage of using this desktop app is that you get to trade at impressive speeds.
This is a mobile app that helps you execute trades from your smartphone itself. It also boasts of a host of other cutting-edge features including an advanced dashboard, a customizable watchlist, trading tips, advanced technical charting, price alerts, and access to live prices. With a 4.4 star rating, IIFL Markets is one of the most downloaded trading apps in the country.
IIFL MF App:
If you prefer to trade and invest in mutual funds (MFs) alone, you’ll find IIFL’s MF app extremely useful. Dedicated to help you track and trade in MFs, this app allows you to have a test run as a guest user. It’s also equipped with top-class features such as portfolio tracking, industry news and expert views, research-based schemes, and integration with the IIFL Markets app.
By opening a trading account and linking it with your Demat account, you can make the most of the electronic solutions available to help you trade online. Before you open an account, ensure that your documents are in place, so you can get through the process smoothly and in a timely manner. If you’re a beginner to online trading, it’s a great idea to spend some time getting to know the features of the trading platform and explore its features before you begin trading. This way, you can make use of all the tools available at your disposal.
Frequently Asked Questions (FAQs)
What are the documents required to open a trading account?
Here’s a list of documents that are required to open a trading account –
- Identity proof (PAN card with a valid photograph)
- Address proof (Ration card, voter ID card, passport, Aadhar card, telephone bill (only landline), electricity bill)
- Proof of bank account
- Income proof (photocopy of ITR, net worth certificate by chartered account, salary proof, current bank account statement)
- Bank account statement/passbook/gas bill
Who can open a Trading account in India?
- Resident individuals
- Partnership firms
- Registered/unregistered trust
- Registered/unregistered society
- Association of Persons (AOP)
- Mutual Funds
- LLP (Limited Liability Partnership)
- FII/FPI (Only trading account)
How to close a trading account?
Here’re the following steps that you need to follow to close a trading account:
- Inform the brokerage company or depository participant you had opened your account with.
- The next step is to fill an account closure form.
- In the account closure form, you need to mention the reason for closing your trading account
- Once you have filled your account closure form, you need to submit it to your DP.
- Your account will be closed once your request is approved.
What types of securities can be traded through trading account?
Through trading account, investors can trade in securities like equities, futures, and options. Not just equities, currency derivatives can also be traded through a trading account.
Can minors open a trading account?
No. Trading account cannot be opened in the name of a minor. Usually, brokerage firms combine both trading and demat account into one comprehensive account. Also as per financial law, opening a trading account in the name of a minor is prohibited.
What are the different types of trading account?
There are various kinds of trading account in India –
- Equity trading account
- Commodity trading account
- Online and offline trading accounts
- 2-in-1 account and 3-in-1 account
- Discount and full-service trading accounts