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What is Trading Account

A trading account helps in placing buy and sell orders in the share market. A stockbroker provides a trading account. Such an account is linked to a bank account through which money can be added to the trading account to buy or sell securities. The Trading account acts as a link between the investors’ bank and the Demat account.

How does a Trading Account work

Trading Account is linked with the Demat Account and Bank Account. An investor can add money from their Bank Account to start the trading. When an investor places an order, and once the order gets executed, the shares get credited in his/her Demat Account on T+2 days, where T is the day of the transaction. Similarly, if investors sell off their shares, then shares are debited from his/her Demat A/c.

Types of Trading Accounts

Based on trading type, there can be 3 types of trading account:

  1. Equity and Derivatives Trading Account: A trading account that allows you to buy/sell stocks and derivatives.
  2. Commodity Trading Account: This account is needed for the commodity market. A commodity market is where trading occurs in primary economic products, i.e., commodities (like agricultural products, gold, oil, etc.).
  3. Margin Trading Account: In this account, an investor can take the advantage of the borrowed funds from the stockbrokers. The Investor funds the trade partially, and the broker funds the remaining against which it charges an interest. This facility is known as Margin Trading Facility (MTF), for which you need a margin trading account.

Features and Benefits of Trading Account

  • Easy trading: A Trading account helps you to monitor the stock movement online. Therefore, facilitating an easy trading procedure to buy or sell shares.
  • Quick transactions: The account facilitates quick and seamless trading transactions. It means you can buy/sell securities swiftly.
  • Customizable trading platforms: The account allows you to customize your watchlists, modify your orders, and even set alerts.
  • AMO or After Market Orders facility can be used to place orders after market hours.
  • Recommendations by experts help investors to access the best performers in different categories.

Parameters to consider while selecting the Best Trading Account in India

Below are some tips that can help you narrow down the search while selecting the best trading account in India:

  • Ease of opening an account
  • Diverse investment options
  • Stable platform
  • User-friendly interface
  • Customer support
  • Range of facilities offered
  • Availability of Margin leverage

How to open a Trading Account

If an investor is willing to start trading online, he/she must open a Trading Account to buy or sell shares in the stock market. This whole digital concept has changed the system for good and made things smooth in terms of investment.

To open an account, you need to follow the below steps:

  1. The first step is to select a stockbroker. While selecting, you need to keep in mind that the stockbroker should be trustworthy as you will be investing your money through them.
  2. As every broker charge you certain amount of fee, called Brokerage, to process the orders, do compare these Brokerage rates before opening the account.
  3. Enquire about the procedure of opening an account once you are done selecting the stockbroker.
  4. Follow the process of opening the account as per your stockbroker. Submit the required documents and wait till the verification is completed.
  5. As it’s a digital process, you may require verifying your identity through IPV (In-Person Verification). In this step, you just have to record a short video of yourself to confirm your identity
  6. Once the submission and verification are completed, you will receive your account credentials on your registered e-mail id.

You can then start trading easily.

Documents required to open a Trading Account in India

To open a Trading Account, you will have to submit the below-mentioned documents:

  • Identity Proof: PAN Card
  • Address Proof: Either Aadhaar Card, Passport, Driving License, Voter id or last 3 months bank statement
  • Photograph
  • Signature on white paper
  • Bank Details: Any Bank proof (cheque or Passbook) bearing client name, account number & IFSC code
  • Income Proof: Either 6 months bank statement, 3 months’ salary slip, net-worth certificate, Holding Report, ITR Statement, or Demat Holding Statement.

Advantages of Opening a Trading Account

Trading Accounts offer manifold benefits to investors, making the share trading ecosystem more robust and efficient. A few of such advantages are detailed below:

  • To buy or sell stocks, it is mandatory to have a trading account.
  • To analyze the trade opportunities available and accordingly draft out a trading plan.
  • Allows investors to set their own trading limits with speedy execution of trades.
  • A well-maintained record of every transaction.

Trading Account Fees and Charges

A Trading Account can be opened with zero account opening charges. . Bajaj Financial Securities Limited offers Demat & Trading Account for free through its Freedom subscription pack. Those who wish to reduce their brokerage can opt for other subscription packs while opening their Demat & trading Account as detailed below:

Freedom Pack:

Yearly Subscription Charges: Free Demat AMC (1st year – Free, 2nd year onwards – ₹431)

Brokerage Rate: ₹20/order (For all segments)

Professional Pack:

Yearly Subscription Charges: ₹2500

Brokerage Rate: ₹10/order (For all segments)

Bajaj Privilege Club:

Membership: ₹9,999 per annum

Brokerage Rate: ₹5/order (For all segments)

Take your first step towards investing in the share market by opening your Demat & Trading Account with BFSL today.

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Open Demat & Trading Account

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Frequently Asked Questions (FAQs)

A free trading account is one which can be opened without paying any account opening fee. With Bajaj Financial Securities Limited, you can open free account through Freedom subscription pack with no annual subscription charge in first year and Rs. 431 from 2nd year onwards.

The difference between a Demat and a trading account is that a Demat account holds the shares and securities in digital mode, while a trading account provides the interface to buy and sell shares in the share market.

Yes, the trading account is a nominal account as it shows both debit and credit transactions in a financial year.

Yes, online trading is safe, however, you must do the due diligence to ensure your username, password and any other login information is secured with you.

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