Trading Account : Meaning, Benefits and All You Need to Know

Trading is on the rise. Inflation, coupled with less-attractive interests in traditional investment instruments, prevents investors from building wealth. Equities, meanwhile, present an inviting opportunity, allowing investors to benefit from economic and corporate growth. Thanks to technology, investors can now trade from home and learn several trading strategies to improve their returns.

However, a Trading Account is a must to reap these benefits. This article will give you a comprehensive picture of a Trading Account.

What is a Trading Account?
 

A Trading Account is a financial tool that houses your assets. With a Trading Account, you can buy and sell different securities, including equities and mutual funds. SEBI registered Brokers offer Trading Accounts. You can open an account online and gain access to the capital markets, advisory services, etc.

With IDFC FIRST Bank’s 3-in-1 Account, you can also access the equity, derivatives, currency and commodities market. ICICI Securities Limited’s  state-of-the-art trading platform is a bonus, as it offers a seamless interface and makes trading a delightful experience.

Basics of trading account
 

A trading account can helps us to make   investments in several instruments such as securities, derivatives, currency and commodities. It stands synonymous with a variety of accounts which also include tax-deferred and retirement investment accounts. However, a trading account differs from other investment accounts in terms of activity, the purpose of the activity, and the related risks.

Day trading is an important factor that distinguishes a trading account from that of other accounts. It is an activity in which assets are bought and sold on the same day.

To open a trading account, an individual needs to apply with  a brokerage firm with prerequisite documents as laid down by SEBI. It includes PAN details, Aadhaar number, photograph, and other documents (which may vary from person to person).

Earlier, opening a trading account was a daunting task with an extended application process. However, now you can open a trading account online and start investing in stocks, bonds, and securities without any hassles. IDFC FIRST Bank offers a 3-in-1  account which gives you the freedom to operate your demat, trading and bank account simultaneously. The Demat and bank accounts are maintained by IDFC FIRST Bank as a registered SEBI entity, and the trading account is managed by ICICI Securities Limited.

IDFC FIRST Bank 3-in-1  account offers zero fees on account opening and no AMC for the first year. Additionally, you can earn interest on the hold amounts and get prime and prepaid brokerage plans for effective investments and also use the research & eATM facilities.

What are the benefits of a Trading Account?
 

A Trading Account offers several benefits that can help you trade and invest profitably and with confidence.

1. All-round access
 

There are several stock exchanges in India. The companies listed on them can sometimes differ as some prefer listing only on one exchange. A Trading Account gives you access to all the exchanges, so you do not miss out on the opportunity to invest. It also allows you to cross-sell your securities and manage your assets earned from different assets in a single place.

2. Live updates
 

The stock markets are highly volatile. Things can change within minutes and wipe off all your profits. Therefore, live updates are essential, and a Trading Account offers this feature. Whether you are doing intraday, swing, or positional trading, the live updates can help you maximise your profits and become a better trader.

3. Comfort
 

You can open a Trading Account online and trade from the comfort of your home. It is incredibly convenient and gives you the freedom to carry out trades whenever you want to.

Documents required for a Trading Account
 

You need certain documents to complete the KYC process and open a Trading Account. You will need your Aadhaar card number, your mobile number registered with your Aadhaar, and your PAN card information. If you do not have a phone number registered with your Aadhaar, you might have to follow the paper based mode for account opening.

A Trading Account can be the gateway to wealth creation. You can invest in equities, mutual funds, and digital golds with a Trading Account and earn inflation-beating returns. However, choosing the right plan and broker is key to a seamless experience. Open an account only when you have conducted thorough research.

Selecting the best trading account in India
 

Trading accounts include some account maintenance charges, so based on the trading frequencies, you must choose a reliable brokerage firm or a platform that provides affordable and cost-effective services. Here is the way to select the best trading account in India.

• Look for a service provider that offers comprehensive solutions to meet your trading requirements.
• Consider their fees and service charges. Low charges bundled with complete and extensive services are the features you must look for in an account.
• Seek your long-term requirements and goals before choosing an account since most transactions in a trading account incur some cost. Choose an account that aligns with your extended-period goals.
• The best trading platform must also be quick, robust, and have the lowest downtime. You must be able to access it anywhere anytime.

It is essential to find a reliable trading service provider to encash the most from your account and trade without hassles. Moreover, also consider the support team availability and their accessibility for a quick query resolution.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.