How to choose the best broker for Demat and trading account? How to choose the best broker for opening a Demat and trading account?, Things to keep in mind before opening a Demat account? In today’s world, most working-class people are looking for various investment options so that they can save their earnings and also earn some more on this investment. Gradually, the number of individual retail investors is increasing in India. This seems to be a period of change, which China experienced a few years ago.
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How to choose the best broker for Demat and trading accounts?
Many people are becoming interested in investing in equity, mutual funds, and other money market instruments. In one of my posts, I discussed about Demat account, which is very important for managing your investments. Here I am going to give some information about the Demat account.
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Provider:
A Demat account which acts as a storage for your securities is provided by the depository. A depository is an organization that holds securities. There are two depositories in India:
(1) Central Depository Services (India) Limited.
(2) National Securities Depository Limited.
Between the depository and the account holder, there will be a depository participant which can be called the demat account provider. Like India Bulls, Religare, India Bulls, etc. These intermediaries provide the demat account as well as all the services associated with it.
Before choosing a demat account provider you should check the following points:
(1) Brokerage:
Along with the demat account, you will also have to open a trading account to buy and sell securities. It is better to open both with the same provider. Since brokerage is the primary source of income for brokers, they will decide the cost of brokerage based on the frequency of your trading. This is why brokers insist on you trading as much as possible in different combinations as suggested by them (if you do not know much about trading). So if you are going to trade very frequently regularly, you can ask the provider to reduce the cost of brokerage, which is charged to those who do not trade actively.
(2) Annual Maintenance Charges:
Some brokers charge some amount separately as annual maintenance charges. Discuss these charges with the provider before opening an account.
(3) Charges for Trading Tools:
Most providers have their trading software to facilitate the account holder to buy and sell securities on their own. Some providers charge separately for this, while others do not charge separately but include this cost in the total package cost. So you should be careful enough to compare the charges of different providers and also check the ease of access to that software.
Also, check – Best Mutual Funds to invest in 2024.
(4) Background of the Provider/Brokers:
There are a few things you need to know about the brokers before opening an account. Inquiries should be made about their experience and history of the promoter, error-free performance, etc. This will help you avoid problems in the future. Recently SEBI has penalized a brokerage agency named Karvy for indulging in some activities that are against the law. So be careful while selecting brokers.
(5) Banks:
Nowadays most banks are offering three in one account (Bank Account, debit account, Trading Account). So if you find the above parameters best in any bank then you can open an account with them.
Here are some reputed Demat Account and Trading Account providers in India:
- (1) ICICI Direct
- (2) India Bulls.
- (3) HDFC Securities
- (4) Angel Broking
- (5) Kotak Securities
- (6) SBI
- (7) Religare Financial Services
- (8) Reliance Money.
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