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Want to Buy Shares – Here is how

Buying shares is exciting as well as risky. Wondering where to purchase shares from and sceptical about the procedures. Do not worry! The whole process is very easy that it doesn’t take much of your time. Here, let us go through the basic procedures need to followed to buy a share.

Shares can be purchased from primary market and secondary market.

Primary Market

A company’s promoters seek additional funds sometimes by listing the company in capital markets.

Through IPO (Initial Public Offer), funds are raised for capital and a multitude of other uses. The retail investors can apply for IPO stocks online provided they have a bank account and a demat account.

There is also another scheme called ASBA (Applications Supported by Blocked Amount) through which investors can block the money in the account until the share is allotted. The investors can provide the bank with the Demat account details after which the money gets debited once the deal is finalised. The whole process is hassle free which doesn’t take more than 10 minutes.

Secondary Market

Once the company is listed in IPO, its shares will be available to investors in secondary market.  Those interested can buy or sell these shares.  However, the price will vary based on demand and supply.

In order to buy shares, one must have a

  • Trading Account: Trading account is the link between a person’s bank account and Demat account. It is here that a customer orders whether to buy or sell a share. There are brokers who will help you open a trading account.
  • Demat Account: Here, you store the purchased shares. It serves the purpose of a bank locker.

Factors to note while  Investing 

  • While identifying a broker, make sure of the facilities s/he will provide you such as advices and the brokerage fee for their services
  • No fee is levied to start a trading account though the Demat account comes with an annual maintenance charge. A specific amount is levied while you sell the shares too.
  • Do a KYC (Know Your Customer). In order to do that provide your
    • Proof of Identity – Provide identity cards such as Pan Card or Adhar card
    • Proof of address – Provide address proofs such as Adhar Card or driving license
    • Bank Details – Details of the bank in which you have the invested money
    • Proof of Income – Six months bank statement or an income tax statement which helps a broker understand the financial stability of a customer.

The process of   buying shares  is totally trouble free. Be wise by starting a demat and a trading account and pave your path to wealth creation.

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