alexa
Indianmoney.com Missed Call Number
Home Articles How To Buy Shares?

How To Buy Shares?

IndianMoney.com Research Team | Updated On Tuesday, February 20,2018, 12:35 PM

5.0 / 5 based on 1 User Reviews

How To Buy Shares?

 

 

 

Buying shares is not only exciting, it can give you a lot of money. If you are willing to bear high risk, then shares give you good returns. In this article you will learn how to buy shares, and enter the exciting World of trading (buying/selling) shares.

Want to know more on demat and trading accounts? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

 

You May Also Watch: 

 

 

How To Buy Shares?

 

STEP 1 : Get your PAN Card

 

For any financial transactions, you need a PAN. A PAN is a unique 10-digit alphanumeric number, which is allotted to you by the income tax department. You require a PAN to invest in an FD, Mutual Funds, RD, PPF and yes, shares.

 

SEE ALSO: Smart Tips To Pick Stocks

 

STEP 2: Find a Broker

 

You cannot buy and sell shares directly on a stock exchange. There are some people who are authorized to buy and sell shares on the stock exchange. They are called brokers.Brokers can be individuals, Companies or even online agencies, who are registered and licensed by SEBI.

 

 

STEP 3: Get your demat and trading account

 

You have a broker, but you need a demat and trading account to buy and sell shares. A demat account holds your shares in an electronic format. If you want to buy and sell shares, you need a trading account. NSDL and CDSL are the depositories which provide demat and trading accounts in India, through brokerage firms.

 

STEP 4: Know your depository participant

 

A depository is a link between Companies listed on the Stock Exchange and you and other shareholders. It helps you buy shares in a paper-less manner. NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) are the 2 depositories in India.

A depository issues shares through associated agents called depository participants (DPs). A DP could be a bank, financial institution or a broker, which is responsible for the final transfer of shares.

 

Keep your Financial Cognizance up to date with Wealth Doctor App

 

 

STEP 5: Buy shares

 

You must inform your broker on the Company whose shares you want to buy, the quantity and the price of purchase. When the shares reach that price, the broker purchases them on your behalf. The buy order remains valid only till a certain time. If your buy price is not reached within that time, the order is cancelled and you have to place a new order.

 

STEP 6: Dividends are credited to your bank account


All the shares you own are held through 2 depositories, NSDL and CDSL. Let's say Company X wants to give dividends. It will get the list of shareholders from NSDL and CDSL. If you have bought the shares of Company X, then dividends will be credited directly to your bank account. Be Wise, Get Rich. 

 

Did you find this article useful? You can Rate us
5.0 / 5 based on 1 User Reviews
Article Author

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

Get It now!