How do I buy shares with a Demat account?

How can I purchase shares using a Demat account?

Purchase shares from a Demat account after you follow these 6 steps.

1.Get your PAN Card

Your Permanent Account Number (PAN) card is vital as it is legal identification of your income stream and taxes. You will need to present your PAN card to complete any financial transactions, as per the regulations set by the government. This card is crucial to help you understand your tax obligations.

2. Make sure you have an active account

Before you open a Demat account you must have a bank account. Without a bank account, you will not be allowed to buy shares online. Your bank account will allow you to transfer funds to your Demat account. Your trading account will link your Demat account to your bank account. If you intend to sell shares, the settlement will be credited within T+2 Days to your Demat account. The funds can then be transferred to bank account.

3. Create a Demat account

To purchase shares online, you need to open a Demat share account with any stockbroker. Choose the stockbroker who best suits your needs. To open your Demat account, you will need to submit a series of documents. The process is quite simple and can be completed in a matter of days, depending on which stockbroker you choose. Demat accounts are similar to bank accounts, and allow you to deposit money.

You can use the share market Demat account to buy, sell and hold shares for any length of time. Remember that Demat accounts can only be opened with a DP (Depository participant), who is either registered with NSDL or CDSL, or both.

4. Create a trading account

After opening a Demat account you can open a trading account. The trading account allows you to buy and sell any stock in the stock exchange. To purchase stocks, you will need both a Demat and a trading account.

5. Get your UIN (Unique Identification Number)

Finally, obtain your UIN. SEBI mandates unique identification numbers for all investors and traders to establish a stock market database. If you trade with capital greater than Rs. 1, you will need a UIN. 1 Lakh and more. If you intend to trade with less capital, you will not need a UIN.

Documents required to open a Demat account?

The following documents are required to open a Demat share account. These documents will be helpful in expediting the opening of your share market Demat account.

- Proof of address such as your Passport or Utility Bills, Driving License, etc.

- Proof of identity such as your Aadhar card, Passport, PAN Card or other forms of identification.

- PAN Card

- Proof that income is proven, such as ITR copy, proof of salary, etc.

- A proof of bank account such as a cancelled cheque

- 1 to 3 passport-sized photos

Demat Account for purchasing shares in secondary market

The secondary market is, in essence, the following public offering. The secondary market is where securities are traded. You will need to open a trading accounts with your broker if you want to purchase shares on a secondary market. Your broker will confirm that you have purchased your trade after you receive it. After that, your shares will appear in your Demat account within T+2 days. The stockbroker will take care of the rest and you would not have to do anything.

Your stockbroker should remind you that the shares will be transferred into your Demat account if you have paid the full amount. Your stockbroker can withhold the transfer of shares if there are any outstanding dues.

Conclusion

You now have a good understanding of how to buy shares via a Demat account. Before you start the process, make sure that you have both a Demat and a bank account. Angel One can help open a Demat account for you in a short time. The only thing you will need to do is provide minimal documentation so that you can begin your investment journey quickly.