How Do I Open a Brokerage Account and What Is It | Motilal Oswal

How Do I Open a Brokerage Account

With the growing interest in the stock market today, you may also wish to foray into this arena to grow your income and wealth. While your intentions and goals may be clear, you might still need some clarity on the nitty-gritty of how to begin your journey as an investor. Firstly, apart from a Demat Account, you will also need a brokerage account to start trading online. While you might be well-versed with the importance of a Demat account, you might still need to understand the function of a brokerage account and the charges associated with the same.

What’s a Brokerage Account?

A brokerage account is essentially the bridge between you and the stock market. With a brokerage account in place, you can buy and sell stocks, invest in mutual funds, bonds and trade in securities. As per your investment needs, you can open a brokerage account with a low-cost discount broker or a pricier full-service one. Of course, the service portfolios and charges levied by each will vastly differ from the other.

Do I need a minimum fund amount to open a brokerage account?

Now that you know the importance of a brokerage account, you might be wondering about the minimum fund requirements of such accounts. The good news is that most online stock brokers will allow you to open an account against just a nominal initial deposit. Therefore, you can open brokerage accounts with initial deposits as low as ₹ 200.

However, to encourage online trading, discount online brokers have also started waiving this initial deposit amount. Thus, you can also opt for such online brokerage firms that allow you to open a brokerage account without any initial deposits.

Do I have to maintain a minimum balance in my brokerage account?

Since a brokerage account is simply used to hold your securities, initiate and complete trades, you won’t need to maintain any minimum balance in this account. In other words, this account simply stores your stocks and securities. Thus, there are no minimum balance clauses for brokerage accounts.

Brokerage Fees and Charges

Your payable brokerage charges will vary depending on whether you pick a discount or full-service broker. For instance, your discount online broker may offer you a choice between a monthly unlimited trading plan and a flat per trade brokerage plan.

Intraday trading charges will vary from 0.01% to 0.05% of the transacted volume, while delivery charges will vary from 0.2% to 0.75% of the traded volume. You will also have to pay security and commodity transaction charges, stamp duty and GST when trading on the stock market.

Conclusion

Opening a brokerage account is the first step in your stock market trading journey. Thanks to the digitisation process, you can open a brokerage account online within just a couple of minutes. You can visit the websites of online stock brokers and initiate this account opening process by simply submitting your KYC documents and paying the minimum opening fees. Alternatively, you can opt for a discount online brokerage firm that allows you to forego this opening fee.

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account | Upcoming IPO

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