Want To Open A Trading Account? Here Are The Different Types Of Accounts Available

Every task necessitates certain elements for completion. Just as cooking calls for a set of ingredients and a person to process them, and shopping necessitates the availability of a marketplace, a buyer, a seller, money, and the willingness to make a purchase and sale, investing in the stock market requires a trading account and a demat account.

In this article, we shall discuss what is a trading account, how to open a trading account, and the different types of trading accounts you can choose from. 

How To Open A Trading Account In India 

A trading account is an account through which securities can be purchased from and sold in the securities market. Your trading account serves as the conduit between you and stock exchanges.  A trading account platform allows users to check the latest market prices of various securities in real-time, and buy/ sell orders can be placed in various segments (for which the account holder has permission to trade). 

You can open a trading account with any registered stock broker in India. However, before selecting a broker, you must conduct substantial research and choose one with credibility in the market, an excellent trading platform, and feasible account charges.  You can visit the selected broker’s website and complete the process of opening a trading account. It is important to keep documents such as your PAN card, a valid identity proof, a valid address proof, and recent passport-size photographs handy. 

Different Types Of Trading Accounts 

Just as there is no dearth of stock brokers to choose from, there is no dearth of the types of trading accounts available for your selection. Here are the major types of trading accounts available in India. 

Equity Trading Account

Through this type of trading account, you can buy and sell securities in the equity segment. You can trade in equity stocks for delivery or intraday. You can also enable Derivatives trading (with permission from the stock broker) to trade in Futures and Options based on equity stocks. If you wish to purchase shares for delivery, you shall also require a demat account linked with your equity trading account. 

Commodity Trading Account

For trading in commodities, you must open a Commodity Trading Account. You can open such an account with an authorized commodity broker and subsequently trade on the commodity exchanges in India. Some of the commodities you can trade in are gold, silver, nickel, agricultural products, etc. 

Discount Broking Account

In order to reduce the cost of online trading in the share market, you can opt for a Discount Broking Account. While such an account can be used to place buy and sell orders in the securities market at significantly low brokerage costs, it does not contain several other features synonymous with modern-day trading accounts. 

Full-Service Broking Account

If you wish to access a wide range of features and functions regarding online trading in the share market, you can opt for a Full-Service Brokering Account. This type of trading account allows you to enjoy access to various market-related reports as well as personalized trading advice. The costs associated with such an account tend to be higher than those of Discount Brokering Accounts.

Two-In-One Trading Account

You can select a two-in-one trading account and open a demat and trading account in one go. This will save you the hassle of opening two accounts and linking them. 

Three-In-One Trading Account

In order to reduce your effort in starting trading in the securities market, you can choose to open a three-in-one account. Such an account will be a combination of a bank account, a trading account, and an open demat account. Brokerage houses associated with banks usually offer the facility of a three-in-one account. 

Offline Trading Account

In stark contrast to an online trading account, where the account holder can place buy and sell orders, offline trading accounts require the account holder to enlist the services of a registered stock broker and place trading orders through them. 

The selected broker notes the order and places it with a stock exchange, following which a physical contract note is issued and shared. Owing to the degree of time, effort, and cost involved and the lack of transparency and control, this type of trading account is fast becoming a mere theoretical concept. 

To Sum It Up

Depending on your budget and requirements for features, you can choose the type of trading account that is ideal for you. Then, you can proceed to open a trading account with a stock broker of your choice and start investing in the securities market.