Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How to buy shares online in India
Learn how to buy shares online in India without a full service stock broker by following our 7 step guide.
Thanks to online share trading platforms, it’s now easier than ever to buy and sell shares online in India. This guide will take you through the basics, including how to buy shares online, how much it costs and whether it’s a safe option for you.
Choosing an online share trading platform can be one of the most challenging parts of the process. There are dozens of platforms available to Indian investors – some of them are offered by the major banks, while others are provided by specialist stockbrokers.
While it might be more convenient to stick with your current bank, you could lose out in terms of brokerage fees. Instead, compare the features and fees of a number of platforms before choosing the right one for you.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
What you need to consider when picking a broker:
- Brokerage fees. This is the fee that applies to each buy or sell transaction. Depending on the platform you choose and the size of your transaction, this could be a flat fee or a percentage of the total transaction cost.
- Other fees. Brokers can charge all kinds of additional fees to use their platform. Some of the most common include an inactivity fee, subscription fee and foreign exchange fee.
- What you can trade. Some platforms offer access to Indian stock exchanges only like the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), while others also allow you to trade on stock exchanges all around the world.
- Ease of use. Consider how easy each platform is for the type of trading you want to do. Most providers give you the option of a free demo account for a short period so you can trial the features they offer.
- Who the platform is suited for. Some share trading platforms are designed with casual investors in mind, others are more suited to active and experienced traders.
- Customer support. How easy is it to get in touch with the provider if you ever have any issues? Is their customer service team based locally in India?
Once you’ve chosen a platform you’ll need to register for a demat account and a trading account. A demat account holds the assets you have purchased, while a trading account is used to trade them.
Having both accounts is a requirement in order to be able to buy and sell shares on Indian stock markets like the NSE or the BSE. This step is usually free, but keep in mind that some providers may charge subscription fees or ongoing fees for features such as market research.
The registration process takes place online and if you’re a new customer you’ll need to provide:
- Your name, address, date of birth and contact details
- Your Permanent Account Number (PAN)
- Proof of ID
- Linked bank account details
You’ll usually be asked to deposit a specified minimum amount in order to open an account. Once your application has been assessed and approved, it’s time to start trading.
You may have already decided what shares you want to buy but if not, now’s the time to start researching stocks that match your investment goals. You’ll often be able to access a wide range of market research, analysis and even trading recommendations through your platform, so use this info to help make an informed decision.
You’ll also need to consider the number of shares you want to buy. This will obviously be down to your budget and your investment goals. The good news is that there’s no minimum investment required to trade in Indian stock exchanges. So if company XYZ is valued at ₹500 per share, you can even buy one share if it’s your first time buying.
It’s also worth pointing out that larger purchases may incur higher fees or involve different fee structures depending on the trade. For example, your platform may charge you ₹30 as a brokerage fee to buy a smaller number of shares, but will change the fee structure to 0.1% of the trade value when larger amounts are purchased.
This is where things can get a little confusing for novice share traders. You have two main options when placing a trade to buy shares: you can place the trade “at market” or “at limit”.
- Market orders. You place a market order when you want to buy a share immediately at the best price currently available.
- Limit orders. Placing a limit order allows you to set a maximum purchase price for your buy order. If that price becomes available within your specified time period, your trade will be executed.
Depending on the platform you choose, you may also be able to take advantage of a range of conditional orders that allow you to take advantage of market opportunities. For example, by placing a rising buy order, you can instruct your online trading platform to buy shares in a particular company once its stock price reaches a certain level.
Once you’ve entered all the specifics of your transaction, you’ll then get a chance to review all those details before placing your buy order.
You’ll need to have sufficient funds in your online share trading account to cover the cost of the transaction, including the brokerage fees that apply. The trade settlement period on the NSE and the BSE is two business days, which is commonly referred to as T+2.
Now you’ll need to monitor the performance of your shares in regard to your investment plan. However, the frequency with which you monitor them will depend on your strategy. For example, if you have a long-term investment strategy, you may only check in and see how your shares are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week.
Whichever option you choose, you can review the performance of your investments by logging into your trading account.
When you decide to sell your shares, the process is very similar to the method of buying shares described in Step 4. Once again, you can choose whether you want to sell them via a market order or a limit order. A market order means the shares will be sold immediately at the best available price, while a limit order allows you to set the minimum sale price you’re willing to accept.
Tips when buying shares in India
If you want to get more out of your online share trading, try to keep the following tips in mind:
- Do your homework. Making informed trading decisions is crucial to the success of your investments. Research the financial health and growth prospects of companies by poring over annual reports, keeping an eye out for company alerts, reading share prospectuses and accessing research reports.
- Stay up to date with the Indian economy. Keep an eye on the health of the Indian economy, Reserve Bank interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of share markets in India and overseas. All of these can influence when is and is not a good time for you to invest.
- Start with blue chip companies. One of the safest options for anyone starting out in the share market is to invest in blue chip companies. These are India’s top 50 companies as listed on the Nifty 50 or the top 30 companies as listed on the SBE Sensex, and are typically well-established companies. They usually offer the best chance for minimising your risk and providing steady returns.
- What about speculative shares? Speculative companies are not in the top 100 Indian companies and have a shorter history doing business. Some investors are attracted to buying shares in these companies because they offer the potential for large returns, but be aware that they also have the potential to suffer large losses.
- Buy what you know. Rather than diving in at the deep end and investing in a company which operates in a field you have little or no understanding of, start with industries and businesses you have some sort of background knowledge of.
- Diversify. If you want to minimise your exposure to risk, diversify your portfolio across a range of different industries. If you buy shares across five or six industries instead of just one or two, you can be better protected against losses if one particular industry experiences a sharp downturn.
Risks of online share trading
Before you start buying and selling stocks like you’re Gordon Gekko, make sure you’re aware of all the risks involved, including:
- Financial losses. A company’s share prices can fall dramatically and even drop as far as zero. This can mean significant financial losses for investors.
- Last in line. Shareholders are usually the last in line to be paid when a company goes broke. When this happens, there’s a definite chance that you won’t get your money back.
- Stress. The share market fluctuates on a daily basis, which can cause plenty of stress for investors. If you can’t handle the ups and downs you may be better off looking for a safer and steadier investment option.
- Unexpected problems. Even if you do an enormous amount of thorough research into a particular company, it’s simply not possible to predict the future. Natural disasters, terrorist attacks, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
- Lack of expertise. While investing in the share market sounds quite easy in theory, it can get quite complicated if you don’t know what you’re doing. First-time investors should be wary of getting ahead of themselves.
- Getting in over your head. A final word of warning if you’re thinking of investing in shares: don’t bite off more than you can chew. Make sure to use your common sense and take a cautious approach – good advice no matter whether you’re planning on investing in shares, property or anything else.
Frequently asked questions about buying shares online in India
More guides on Finder
At-home rapid COVID tests in India
At-home COVID tests are the fastest way to find out if you have coronavirus. Rapid antigen tests will become more readily available in India to screen for coronavirus.
Compare COVID-19 rapid antigen tests in India
Rapid antigen tests are the fastest way to find out if you have COVID-19. Here’s what you need to know.
How to track and keep your money transfer safe
Learn how to track your money transfers with common providers available in India.
How to invest in gold ETFs in India
Find out about gold ETFs, what influences their prices, how you can trade them and whether they could be worth your weight in gold.
How to invest money
Learn the basics of what it takes for novices to get started in the investment world in India, including an overview of your options and what to watch out for.
How to invest in oil in India
Learn about the four options available to buy and sell this slippery commodity — as well as pros and cons.
How to buy Bitcoin ETFs from India
Bitcoin ETFs are coming to market. Here’s how you can invest in them.
Ask an Expert