Demat Account: Choosing a broker for investing in stock market? take care of these things

Merely opening a demat account does not fulfill your investment objective. For this you need a right broker, who buys and sells shares for you. Choosing the right broker for your demat account is as important as choosing the appropriate bank account for banking transactions.

Significant increase in the number of demat accounts
In recent years, there has been a significant increase in the number of demat accounts due to increasing awareness about shares. The increase in demat account openings gained momentum in 2019 during India's first lockdown. During this period, the popularity of discount broking firms increased among retail investors, which emerged as the preferred option for opening demat accounts. These companies provided the facility of opening accounts through mobile apps (APP).

Also read- There is fear of 'volatility' in the stock market! Here the temperature of Vix rises, on the other side investors become ruined or ruined within minutes.

What is a stock broker?
A stock broker is a SEBI-registered intermediary and a member of a stock exchange, authorized to execute trades on the stock exchange platform.

Groww and Zerodha have 40 percent stake in India
Discount broking firms like Groww and Zerodha have more than 40 percent active customers in India. This trend is not limited to India only. Discount broking companies dominate the market across the world. For example, online discount broking firm Robinhood has a significant stake in the US financial markets.

Discount Broking Firm
In the last 4 years, discount broking firms have overtaken traditional full service broking firms. They offer low brokerage charges or flat fees with minimal or free demat account maintenance charges. They also offer trading in stocks, commodities and forex. Apart from this, these discount brokerage firms have simplified the process of opening a demat account. Keeping in mind the convenience of young and tech-savvy traders, these companies provide trading services through mobile apps.

Full Service Broking Firm
Traditional full service broking firms claim to have extensive experience in the stock market. They have long-standing relationships with their customers spanning decades. These companies offer comprehensive services, including executing buy and sell orders, providing research on current market trades, issuing trading calls, and offering industry-based reports. Additionally they provide asset management and retirement planning services and allow traders to invest in various financial instruments.

Keep these things in mind while choosing a share broker

• Discount brokers only buy and sell shares as per your order. Full service brokers also give you investment ideas.
• If you understand the dynamics of the stock market, you can choose a discount broker. Otherwise a full service broker is better.
• You can open a demat account with a full service or discount broking firm or both. You can choose the broker that best fits your trading needs and preferences.
• Before choosing a broker, one should know his reputation in the market. At the same time, join the broker only after satisfaction with its services and facilities.

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Tags: Share market, Stock market