Here is a list of simple steps to learn how to invest in share market as a beginner, follow these and get started.
1.Get your PAN card
In our country, it is a primary requirement to have a PAN or Permanent account number in order to enter any financial transaction. The PAN is basically a unique ten digit number with alphanumeric characters in it. It is assigned to you by the tax authorities so that you can enter the tax liabilities and it is assigned only once for every individual. Those who are looking forward to investing in share markets should have an active PAN as it is compulsory. The PAN is also required while opening a new bank account or doing any investment in mutual funds and it is also compulsory while filing tax returns and etc.
2. Find a broker
As no one can go directly and start buying and selling stocks in the investment market so the second step is to find a broker for yourself. A broker is authorized to buy and sell in the market. It is very important that the investment broker understands your expectations as well as your investment making capacity. It is important to be open and honest with your investment broker as he works as a gateway to your success in stock market. There are individual brokers as well as brokerage firms available in the market and you can choose according to your requirement and preference.
3. Demat and trading account
After crossing these two initial steps, you will now need a Demat and trading account. A Demat account is an account that holds the stocks on your name in which you invested and these stocks will be shown on your stock portfolio. It is impossible to hold your shares without a Demat account so you need to open one in order to start investing as there is no other way to do that. The shares cannot be held in the physical state so they need to be held in dematerialized state or Demat state.
4. Depository Participant
The next most important thing to learn about is the Depository Participant. In India, there are two depositories, NSDL and CDSL. The NSDL depository stands for National Securities Depository Limited and the CDSL depository stands for Central Depository Services Limited. They both have their agents as participants and provides you an account in which you will be able to hold your shares. It is important to decide which one you need according to your requirement and preference of the investment in share market.
If you are one of those who wants to invest big, then you need UIN or Unique Identification Number. The UIN is basically required in a case where you need to trade for Rs. 1,00,000 or more at a single shot. It is totally up to you if you want to play big or go for a smaller start. UIN is not required for the regular investors in share market and you will only need it if you are planning to invest a big amount.
6. Buy and sell
After following all the steps in last you need to start buying and selling. For that, you need your broker. You need to give all the details to the broker about it like, how much you want to pay, which share you want to buy and what quantity do you want. Once your broker is comfortable with the terms, he will help you with the further process. These are the basic steps for beginners on How to invest in share markets start investing in share market and get great returns.