Choosing a stock broker and opening a trading account

How to choose the right Depository Participant?

As far as cost aspect is concerned a Demate account with a broker is much more economical than a Demate account with a bank. For example, you sell 1000 shares at the rate of Rs. 500 per share then, in case of your account with a broker, the broking house would charge you Rs. 25 for executing your instruction slip and in case of a Bank they may charge you Rs. 200 (i.e.0.04 percent of transaction value of Rs. 5,00,000/-). One more benefit of having a Demate account with your broker is that you may authorize your broker through a Power of Attorney to automatically debit your Demate account with him whenever you sell stocks from your holdings in that account, this saves you from the hassles of filling up and depositing delivery instruction slips with the DP in a very short time. I would recommend having a Demate account with the same broker where you have a trading account. Still, if you feel more secure with a bank to have your Demate account then it should be with a bank which is most convenient when it comes to deposit delivery instruction slips.

Choosing a stock broker and opening a trading account

The regular traders and experienced investors look at the lowest brokerage and highest margin while choosing a stock broker. But for the first time investors, brokerage rates should be secondary and they should look at the research and analysis provided by the broker. A good brokerage has a system whereby you get an access to their research team and research reports released by them and a relationship manager is always accessible for your general queries and help. The brokerage should not be a deciding factor as initially your volume will not be very high and once you get expertise in trading, you can shift to a low brokerage broking house. Opening of trading account is almost similar to opening of a Demate account. You will need to fill up an account opening form along with agreement with the Broker together with the following documents.

Passport size colors photograph
a copy of the PAN card.
An address proof (copy of Passport, Driving License, Ration card, Election identity card, etc.)
Proof of Bank account (a cancelled cheque or bank statement can be given)
Proof of demat account
A passport size color photograph of the nominee (if appointed)