How to Purchase and Sell Shares Through Demat Account?

In the era of digital finance, trading shares has become more accessible than ever before. With demat accounts, you can buy and sell shares electronically, eliminating the need to handle physical share certificates. If you are new to the world of share trading, learning how to purchase shares through demat account will simplify the investment process. So, let’s decode how to purchase shares using demat account.

Benefits of using a Demat Account for share trading

• Convenience: With a demat account, you can buy and sell shares from the comfort of your home or office, using your computer or smartphone. There is no need to handle paperwork or visit banks or financial institutions to complete the share buying procedure with demat account.
• Reduced risk: Holding shares in electronic form eliminates the risk of loss, theft, or damage caused to physical share certificates.
• Faster settlements: demat accounts enable quick and efficient settlement of trades. Typically, trades are completed within T+2 days (trade date plus two working days).
• Lower costs: Using demat account for stock trading often comes with lower transaction costs compared to dealing with physical shares.
• Ease of portfolio management: You can invest in multiple types of investments through a demat account. Demat accounts provide a consolidated view of your investments, making it easier to track and manage your investments.

How to trade? Here's what you need to know

Essential documents for opening a demat account

• PAN card: A Permanent Account Number (PAN) card is mandatory for opening a demat account in India.
• Proof of identity: You are required to submit a valid proof of identity, such as an Aadhaar card, passport, or driving license to open a demat account.
• Proof of address: A recent utility bill, bank statement, or passport can serve as proof of address.
• Bank account details: You need to link your savings account with your demat account to facilitate financial transactions.

Choosing the right brokerage firm in India

• Reputation and credibility: Look for a well-established broker with a solid track record and positive customer reviews.
• Brokerage fees: Compare the brokerage fees charged by different firms to ensure that you are getting a competitive rate.
• Trading platform: Evaluate the broker's trading platform to ensure that it is user-friendly and it meets your investment needs.
• Customer support: Choose a broker that offers responsive and knowledgeable customer support to assist you with any queries or issues.

One such reputable brokerage firm is Axis Bank. With an Axis Direct Demat and Trading Account, you can integrate your Savings, Demat, and Trading Accounts, providing a seamless banking and investing experience. You can invest in multiple types of investments and get access to investment tips as well.

How to buy shares through your Demat Account?

Given below are the steps to purchase shares via demat account:

Step 1: Link your bank account with your demat account

To facilitate financial transactions, you need to link your savings account with your demat account. This allows you to transfer funds when buying or selling shares.

Step 2: Research and select shares to buy

Before making any investment decisions, you must do thorough research on the companies you are interested in. Consider factors such as the company's financial position, growth expectations, and market trends. You can find many research and analysis tools online to help you make informed investment decisions.

Step 3: Placing the buy order through your demat account

Once you have completed Step 2, here’s how to purchase shares through Demat -

• Log in to your broker's trading platform using your credentials. You can use their app or website to purchase shares online through demat account.
• Search for the desired company's stock using its symbol or name.
• Enter the quantity of shares you wish to buy and the price at which you want to buy them.
• Review and confirm your order details for buying shares through demat account.
• Once the order is executed, the shares will be credited to your demat account.

How to sell shares through your Demat Account?

Step 1: Setting up a sale strategy

You must sell your investments at the right time. Before selling your shares, it's important to have a clear strategy. Consider factors such as your investment goals, market conditions, and the performance of the company. Determine the price at which you are willing to sell your shares and set a stop-loss order if necessary to limit potential losses.

Step 2: How to place a sell order?

• Log in to your broker's trading platform using your credentials.
• Select the shares you wish to sell from your portfolio.
• Enter the quantity of shares you want to sell and the desired selling price.
• Review and confirm your order details.
• Once the order is executed, the shares will be debited from your demat account.

Step 3: Understanding the settlement process

After a sell order is executed, the settlement process begins. In India, the settlement cycle is T+2 days, meaning that the funds from the sale will be credited to your linked savings account within two working days after the trade date. It's important to keep track of your trades and ensure that the settlement process is completed smoothly. This would help you learn and understand how to trade shares using demat account.

Also Read: Opening a demat account: A Step-by-step Guide

Conclusion

Learn how to purchase and sell shares through demat account to handle your investments electronically. By understanding the benefits of using a demat account, fulfilling the necessary requirements, and following the step-by-step guide for buying and selling shares, you can navigate the world of share trading with confidence. Remember to conduct thorough research in the demat account share purchase process, choose a reliable broker, and stay informed about market trends to make the most of your investments.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.