Helpful Steps On How To Buy Shares

Buying shares is one of the sought-after move to financial freedom. Business-minded people let their money earn for them through buying shares in the stock market. But before being overwhelemed with this financial strategy, you have to know the basics on what you are getting into. So, how to buy shares?


Step 1: Go and get a broker.

Only the members of the stock exchange are licensed to buy and sell shares. They are called brokers. So, how to buy share through them?

Their job is to buy and sell shares on behalf of their clients. Just be very careful with whom you trust your investment with. Every stockbroker has to be first registered with the Securities and Exchange Board, the stock market regulator. You can choose a directly registered broker or a sub-broker, a person licensed through a directly registered broker.

To know the list of the registered stokbrokers, you can check the Stock Exchange directory or the National Stock Exchange web site. If you prefer an online broker, you can start searching the web sites of well-known online players.

Step 2: Go and get yourself a demat account.

Back then, a physical certificate is the proof of one’s share. But today’s age where business transactions can be done online, you can have electronic certificates in demat accounts. Demat refers to dematerialzed account where it projects all of your shares. From time to time, you will receive demat statement updating you of your shares.

So, how can you have a demat account? First is you have to go to a Depository Participant, the agent of a depository place where an investor’s stocks are held in electronic form. The main function of a depository participant is to give you an account where you can hold your shares.

Step 3: Go and get yourself a PAN
The taxman will demand a Permanet Account Number, a unique 10-digit alphanumeric comnbination that tracks and identifies the database of a taxman. In how to buy shares, this is a must-have. This is also a must in money transactions such as when you get hired, filing your income tax return, when opening a bank account, when buying/selling a property, and many more.

The process of getting a PAN is not that tedious but you might as well seek a tax consultant.

Step 4: Go and get a Unique Identification Card

The Unique Identification Card is for an investor involved in a single trancation with a huge amount of money. It lets them buy and sell shares or mutual fund units. This card is an attempt of the Security and Exchange Board to create a database of all the investors and market participants. To get your UIC, visit the Points of Service office and get an agent. As part of the process you have to fill out some forms and submit yourself for further verfiication such as fingerprints. A UIC is an identification for filing your income tax returns.


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