How to Open a Trading Account?

India has been moving towards a cashless economy. The government is actively pushing digital forms of transactions in the country. Digital modes of transactions are faster, secure and more cost-efficient. If one traces the origin of the digital revolution in the financial sector of the country, the search may end at the capital markets. The stock markets had migrated from physical to electronic mode of trading in 1996. The introduction of the Depositories Act 1996, led to the dematerialisation of shares.

Before the conversion of physical certificates into an electronic form, the stock markets operated on an open outcry system. Traders communicated verbally and through gestures to buy and sell shares. With the advent of electronic trading, investors do not have to be present at the stock exchanges and a simple online command is enough to execute a trade. However, certain tools are a prerequisite for electronic trading. You need to have a demat account, trading account and bank account to access the capital markets.

What is a Trading Account?

All the three accounts are linked and work in tandem with each other. The bank account is used to store cash which is used to trade in securities. The demat account is hosted by depositories and is used to store the different kinds of securities bought by the investor. But when you have to sell your holdings or buy new securities, you will have to use a trading account. The trading account is essentially an interface between the demat account and the investor. It is not possible to buy or sell a unit of security without a trading account. The trading account has replaced the open outcry system prevalent in earlier times. Now, you just have to place the order through the trading account and the request is forwarded to the stock exchanges. Upon the completion of the transaction, the securities are deposited in the demat account and the required amount is deducted from the bank account.

Uses of Trading Account

A trading account is not limited to stocks. There are trading accounts for currencies, commodities, bonds, gold and exchange-traded funds. There are several benefits of an online trading account. The biggest benefit is that you can open trading accounts online and do not need to visit a bank or the office of the broker. Trading accounts provide one-point access unlike physical trading.

Through a single trading account, you can access stock exchanges like BSE and the National Stock Exchange and commodity exchanges like Multi-Commodity Exchange and National Commodity and Derivatives Exchange. Open trading accounts online to get the flexibility to trade through multiple mediums. With a trading account you can trade through mobile, desktop or through a call.

Step by Step Guide on How to Open a Trading Account

Opening a trading account online opens up a host of investing possibilities. You must be wondering how to open a trading account. You can open a trading account in a few simple steps.

  • In the first step, choose a brokerage firm to open a trading account. Conduct thorough research and opt for a credible brokerage firm. Take the various charges levied by brokerages, the interface of the trading platform and the value-added services into account before finalising a brokerage.
  • After zeroing in on the broker, get in touch with and enquire about the trading account opening procedure. The brokerage will require you to fill up an account opening form and a Know Your Customer form. A representative from the brokerage firm will assist you with the process. Most brokerages offer a demat-cum-trading account as a demat account is mandatory to store the securities.
  • Along with the forms, you will have to submit identity proof, residence proof and in some cases proof of income. A photocopy of the Aadhar card or passport, besides several other documents can be used as proof of residence. Similarly, a copy of an Aadhar card or PAN card can be used as identity proof. The PAN card is compulsory to open a trading account.
  • Post submission of the documents, the brokerage will conduct a manual Know Your Customer verification. A representative may visit your house to verify the documents or you may be asked to verify the documents over the phone.
  • If you do not want to manually verify the documents, you can opt for the e-KYC process. For the e-KYC process, you will have to ensure that your PAN card is linked to the Aadhar card and your bank account. The mobile number submitted in the account opening form should be the same as the Aadhar card for the e-KYC process.
  • It generally takes 3-4 days to activate the trading account after the completion of the verification process.

Benefits of India Infoline Trading Account

IIFL Securities is one of the oldest and the most credible names in the market. Opening a trading account with IIFL Securities can provide you a host of benefits.

  • The company offers paperless account opening option improving customer convenience.
  • Successful investing is a result of informed decisions based on reliable information. Along with the facility to buy and sell securities, you also get access to reliable financial data and research reports with the IIFL Demat and Trading account.
  • The requirement for different categories of investors varies. A day trader may need low brokerage rates, but a long-term investor may not be concerned with brokerage fees. IIFL Securities provides an option of three brokerage plans to choose from.
  • The company has an extensive network of over 4000 branches across India.
  • It also gives the investors an edge with its five next-generation trading platforms. With IIFL Securities, you do not have to worry about asset classes as it facilitates trading in all segments such as equity, derivatives, commodity, currency and mutual funds.

IIFL Trading Platforms & Technologies

IIFL has developed various trading platforms to suit the needs of different types of investors. Some investors need different types of charts and financial data, while some investors need just research reports. Depending on the level of investor’s sophistication, IIFL offers five different next generation platforms.

  • IIFL Markets:

    One of the simplest trading apps available in the country. The IIFL Markets platform has been awarded on multiple occasions. It provides a simple interface with live prices, customisable watchlist and an advanced dashboard.
  • TT Iris:

    It has been developed in collaboration with Spider Software and helps you track important market movements and conduct real-time analysis. The TT Iris platform provides advanced charting and technical analysis tools.
  • IIFL MF App:

    You can invest in mutual funds and track MF investments through the IIFL MF App. The app has a paperless registration process and you can also receive suggestions through the platform.

Along with the IIFL Markets, IIFL MF and TT Iris, IIFL has also developed the TT Web and the TTExe platforms.

Trading Account Charges (Refer to the fees page for details)

IIFL Securities has three equity brokerage plans catering to different types of investors.

  • Variable Brokerage Plan:

    The brokerage under the variable brokerage plan depends on the monthly volume of the investor. Investors with higher volumes get lower brokerage rates. In the delivery cash segment, the brokerage for a monthly turnover of less than Rs 1 lakh is 0.60%, while for a turnover of over Rs 2 crores, the brokerage is 0.15%. There are various turnover slabs between Rs 1 lakh and Rs 200 lakh.
  • Flat brokerage charge:

    The brokerage is charged at a flat rate, irrespective if the monthly turnover, under the flat brokerage plan. The brokerage for delivery trades is 0.50% of the transaction. The brokerage for intraday trades is 0.05% on both buy and sell transactions.
  • Value-added subscription plan:

    The value-added subscription plan has been designed for frequent traders. There are 7 different subscription plans under the model. You can pay an amount and avail lower brokerage charges for a specified period of time. For instance, under the Rs 5000 plan or V5000VAS, the brokerage for delivery trades reduces to 0.35% as against 0.50% in the default plan.

FAQs on Trading Account

Does IIFL provide online commodities and currency trading accounts?

With a trading account from IIFL Securities, you can invest in the commodities and currency markets

Can I trade in the derivatives market with an IIFL trading account?

Yes, you can trade in the derivatives market with an IIFL trading account.

Is IIFL a full-service broker or a discount broker?

IIFL is a full-service broker and provides high-quality research and other financial data to investors. Discount brokers just provide buying and selling services.

Can I invest in mutual funds with an IIFL account?

With an IIFL demat and trading account, you can invest in mutual funds along with stocks, currencies and commodities. IIFL has developed a dedicated platform IIFL MF App for mutual fund investments.

Does IIFL charge a minimum brokerage for trading?

If you are trading in the cash delivery system, you will be charged a minimum of Rs 25 per scrip under the variable brokerage and flat brokerage plans.

Will I get a demat account with an IIFL trading account?

With IIFL, you do not have to worry about opening a separate demat account. IIFL offers demat-cum-trading account which eliminates the need to search for a demat account provider.

Can I invest in IPOs through an IIFL trading account?

Yes, you can invest in IPOs and FPOs through an IIFL demat-cum-trading account.

Does IIFL provide research reports and stock recommendations?

With IIFL, you can rest assured of getting access to high-quality research reports. A team of professional analysts prepares the reports which lead to rewarding stock recommendations.

Open Demat Account at IIFL