Buying shares online has become a convenient and accessible way for individuals to invest in the stock market.
How to buy shares online in India, one needs to open a Demat and Trading account, select a reputable stockbroker, and complete the necessary documentation.
The process involves funding the trading account, researching stocks, placing buy orders through online trading platforms, and monitoring investments.
It is essential to conduct thorough research, stay updated with market trends, and comply with tax and regulatory requirements.
Buying shares online offers flexibility, convenience, and the opportunity to participate in the growth potential of the stock market.
How to Buy Shares Online in India (Updated 2023)
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Buying shares online in India has become increasingly popular as technology has made stock trading more accessible.
Here is a step-by-step guide on how to buy shares online in India:
Step 1: Open a Demat and Trading Account
To buy shares online, you need to have a Demat (Dematerialized) and Trading account.
You can open these accounts with a registered stockbroker or a bank that offers these services. Provide the required documents and complete the account opening process.
Step 2: Research and Select a Stockbroker
Choose a reputable stockbroker that meets your requirements in terms of fees, technology, customer service, and trading platforms.
Consider factors such as brokerage charges, account maintenance fees, research reports, and user-friendly interfaces.
Step 3: Fund Your Trading Account
Transfer funds to your trading account. You can do this through net banking, NEFT/RTGS transfers, or by linking your bank account to your trading account.
Ensure that you have sufficient funds to cover your desired investment amount.
Step 4: Choose an Online Trading Platform
Most stockbrokers provide online trading platforms where you can place buy orders for shares.
These platforms offer real-time market data, charts, research reports, and order execution capabilities. Familiarize yourself with the trading platform’s features and navigation.
Step 5: Perform Fundamental and Technical Analysis
Before buying shares, it is important to analyze the company’s fundamentals and assess its growth prospects, financial health, and industry trends.
You can also use technical analysis tools to study historical price patterns and identify potential entry points.
Step 6: Place a Buy Order
Once you have selected the stock you want to buy, enter the required details in the trading platform.
This includes the stock’s name or symbol, quantity of shares, and the price at which you want to buy. You can choose between market orders (buying at the prevailing market price) or limit orders (buying at a specific price).
Step 7: Review and Confirm the Order
Double-check the details of your buy order, including the stock name, quantity, price, and brokerage charges.
Ensure that you have sufficient funds in your trading account to cover the purchase. Review all the terms and conditions before confirming the order.
Step 8: Monitor Your Investment
After buying shares, it is important to stay updated with market news, company announcements, and industry trends that may affect the stock’s performance.
Monitor your investment regularly and consider setting up price alerts or stop-loss orders to manage risk.
Step 9: Selling Shares
If you decide to sell your shares, follow a similar process. Place a sell order on the trading platform by entering the details of the stock, quantity, and desired selling price. Review and confirm the order before executing it.
Step 10: Tax and Regulatory Compliance
Understand the tax implications of buying and selling shares in India. Long-term capital gains on equity shares are tax-free if held for more than one year, while short-term capital gains are subject to taxes. Keep track of your transactions and comply with tax regulations.
Step 11: Continuous Learning and Portfolio Management
Keep learning about investing and stock market trends to make informed decisions. Regularly assess your portfolio’s performance and consider diversifying your investments across different sectors and companies to manage risk.
It is important to note that investing in the stock market involves risks, and it is recommended to seek advice from financial advisors or professionals before making investment decisions.
Additionally, always conduct thorough research and due diligence before investing in any particular stock.
Documents required to Buy Shares Online
When buying shares online in India, certain documents are required to fulfill the regulatory and compliance requirements set by the stock exchanges and regulatory authorities.
These documents are necessary to open a Demat and Trading account with a stockbroker or a bank.
Here are the documents typically required to buy shares online in India:
- PAN Card: The Permanent Account Number (PAN) card is a mandatory document for investing in shares in India. It serves as proof of identity and is issued by the Income Tax Department.
- Aadhaar Card: The Aadhaar card is a unique identification card issued by the Unique Identification Authority of India (UIDAI). It serves as proof of address as well.
- Passport: A valid passport can also be used as proof of address. It is essential for Non-Resident Indians (NRIs) and foreign investors.
- Voter ID Card: The Voter ID card issued by the Election Commission of India can serve as proof of address.
- Recent passport-sized photographs are required for account opening purposes. The number of photographs required may vary depending on the stockbroker or bank’s specific requirements.
Bank Account Details:
- Bank Account Statement: A recent bank account statement reflecting your name, address, and account number is required to link your bank account with the trading account.
- Cancelled Cheque: A cancelled cheque leaf containing your name, bank account number, and IFSC code may be required for bank account verification.
- Income Tax Return (ITR): Furnishing income tax returns for the last financial year may be required to establish your income status and eligibility for certain investment options.
Know Your Customer (KYC) Documents:
- KYC Application Form: The stockbroker or bank will provide a KYC form that needs to be filled and signed. It includes details such as name, address, contact information, occupation, and other personal information.
- Self-attested copies of KYC Documents: You will need to submit self-attested copies of the identity proof, address proof, and other relevant documents mentioned above.
Power of Attorney (POA) Documents:
- Some stockbrokers may require a Power of Attorney (POA) to be signed. This allows them to debit shares from your Demat account for selling purposes.
Overseas Citizen of India (OCI) or Non-Resident Indian (NRI) Documents:
- For NRIs or OCIs, additional documents such as a copy of the passport, overseas address proof, and Permanent Resident Card may be required.
Top Platforms To Buy Shares Online
When it comes to buying shares online, there are several platforms available that offer convenience, accessibility, and a range of features.
Here are some of the top platforms to buy shares online:
Zerodha is a popular online brokerage platform in India, known for its low-cost trading services.
It offers a user-friendly platform called “Kite” that provides real-time market data, advanced charting tools, and order execution capabilities.
Zerodha also offers a direct mutual fund platform called “Coin” and provides educational resources for investors.
It is widely recognized for its transparent pricing structure, which charges a flat fee per order, making it attractive for frequent traders and investors.
2. ICICI Direct
ICICI Direct is a well-established platform offered by ICICI Bank, one of the leading banks in India.
It provides a seamless online trading experience, offering research reports, trading recommendations, and personalized advisory services.
ICICI Direct’s platform offers advanced features like heat maps, stock screeners, and customizable watchlists. It also provides access to IPOs, mutual funds, and other investment options.
3. HDFC Securities
HDFC Securities is another prominent platform backed by HDFC Bank. It offers a comprehensive suite of investment products and services, including online trading in equities, derivatives, mutual funds, and IPOs.
HDFC Securities provides research reports, market insights, and a user-friendly trading platform called “ProTerminal.”
It also offers various trading tools and analytical features to help investors make informed decisions.
4. Kotak Securities
Kotak Securities is the online trading arm of Kotak Mahindra Bank, offering a range of investment options such as equities, derivatives, commodities, currency, and mutual funds.
The platform provides research reports, market analysis, and access to trading tools. Kotak Securities offers different trading platforms to cater to the needs of different types of investors, including “KEAT Pro X” for active traders.
Sharekhan is a popular online brokerage platform known for its research and advisory services.
It offers a user-friendly trading platform with advanced charting tools, real-time market data, and personalized watchlists.
Sharekhan provides access to various investment options, including equities, derivatives, mutual funds, IPOs, and bonds.
It also offers educational resources and investor education programs to empower investors with knowledge.
5paisa is a discount brokerage platform that offers online trading services at competitive rates.
It provides a mobile trading app with features like advanced charting, real-time market data, and portfolio tracking.
5paisa offers investment options in equities, derivatives, mutual funds, and insurance. It provides access to research reports, stock screeners, and investment calculators.
7. Angel Broking
Angel Broking is a renowned full-service brokerage platform that offers a range of investment services.
It provides an intuitive trading platform with features like real-time market data, customized advisory services, and detailed research reports.
Angel Broking offers investment options in equities, derivatives, commodities, IPOs, and mutual funds.
It also provides educational resources and seminars to enhance investors’ knowledge.
8. Motilal Oswal
Motilal Oswal is a reputed brokerage firm that offers a comprehensive suite of investment services.
It provides a feature-rich trading platform with advanced charting tools, research reports, and market insights.
Motilal Oswal offers investment options in equities, derivatives, commodities, currencies, and mutual funds.
It is known for its research expertise and provides specialized reports like “Wealth Creation Studies” to help investors make informed decisions.
Buying shares online in India has become convenient and accessible through various platforms.
Opening a Demat and Trading account, selecting a reputable platform, and completing the necessary documentation are crucial steps.
Platforms like Zerodha, ICICI Direct, HDFC Securities, Kotak Securities, Sharekhan, 5paisa, Angel Broking, and Motilal Oswal offer user-friendly interfaces, research tools, and a range of investment options.
It’s essential to conduct thorough research, stay updated with market trends, and comply with regulatory requirements.
With the right platform and knowledge, buying shares online can be a seamless process, allowing individuals to participate in the stock market and potentially grow their investments.
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Frequently Asked Questions
Q1. How do I open a Demat and Trading account?
To open a Demat and Trading account, choose a stockbroker, fill out the account opening form, provide the required documents, and complete the verification process.
Q2. How do I fund my trading account?
You can fund your trading account by transferring funds from your linked bank account through net banking, NEFT/RTGS transfers, or other electronic payment methods.
Q3. How do I place a buy order for shares?
Log in to your online trading account, select the desired stock, enter the quantity and price, and choose the type of order (market or limit) before confirming the transaction.
Q4. How do I track my investments?
You can track your investments by monitoring your portfolio on the trading platform, reviewing trade confirmations, and accessing statements and reports provided by your stockbroker.
Q5. How do I sell shares that I own?
Place a sell order on your trading platform by selecting the stock you want to sell, entering the quantity and desired selling price, and confirming the order to sell your shares.
Here are the some Best Platforms To Buy Shares Online in India:-