How to buy shares of a company?

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Congratulations!! You really should pat yourself on the back that you have searched how to buy shares in a company because you are now going to know which 99 out of 100 Indians do not know i.e. how to buy shares?

Share Market participation is ridiculously low here in our country. Very few people in India directly invest in share market and own shares. There are many reasons for this, but the biggest reason I think is the lack of knowledge of how to buy shares.

Various articles on the Internet make it very complicated to understand the process of buying a share. Whereas in reality, as you will see later in this article, it is as simple as ABC. So, without further ado let’s get into it:

You will need 3 things to buy shares in a company:

 

  1. A Bank Account
  2. A Trading Account
  3. A Demat Account

1. A Bank Account

A Bank Account is necessary for having funds from which you will be buying shares. I assume you know how to open a bank account and if not, just go to your nearest bank branch and tell the clerk that you want to open one.

I recommend you open your account in a reputed bank that offers internet banking facility like HDFC bank, Axis Bank, ICICI Bank, SBI etc. I have my bank account in State Bank Of India. They have a really good internet banking facility.

2. A Trading Account

A Trading Account is where you will place buy and sell orders of any share. It is this account in which you will be logging in and shopping for your Favorite shares. Before buying any shares, you have to transfer required funds from your bank account to this trading account via internet banking facility.

3. A Demat Account

A Demat Account is where you will be keeping your shares after you have purchased it. In Bank Account you store money, in Demat Account you store shares.

In Previous days, 10-20 years ago shares used to come in physical forms. In those days when you buy shares, the company delivers it to you and then you keep it in your vault etc.

But it was a very tedious process and carried a risk of duplicating. That is why shares come in digital form now also know as Demat form (Demat is a short form of Dematerialize).

That was it!

If you have these 3 Accounts then buying shares is a child’s play. You will be buying shares in seconds, not minutes.

I know, I know we are not done yet. You are probably wondering how to open a Trading Account and Demat Account. I have a separate article for that as I wanted to keep this article short. I will be posting that article in a couple of days. For now, at least you know what are the things required to buy a share.

I want to thank you for reading this article. I really appreciate that. Please comment below if you have any questions. And if you liked this article, do consider sharing it on Facebook, Twitter because it helps the blog. Thanks again for reading, I will see you in the next post.

Cheers!

 

 

2 comments

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