How to Invest in Share Market Online in India – The Share Market Guide

Investing in Indian Stock Market became the most popular investment platform among the Indian investors after “Dematerialisation” (DEMAT). In this guide, I am sharing the guide that explains “How to Invest in Share Market?”.

So, basically we are going to learn the following in this guide:

  • How to start investing?
  • How to make an investment approach?
  • What is Stock Market?
  • How to Invest in Stock Market?

How to start investing?

Well, this guide is all about how to start investing in stock market. But anyone can start investing in other assets also. Because so many investment options are available in India on ease.

If you are interested in other investment instruments than you can read my another guide on Best Investment Options in India to invest.

If you or someone looking to invest in Stock Market, few questions may click in your mind like – What is Share Market? How Share Market Works? How to Invest in Indian Stock Market? or What are the assets or Financial Instruments being traded in Stock Market?

Don’t worry, everything is explained in this guide step-by-step. But instead of jumping right in the Stock market is not good in my opinion. You should decide an investment goal and approach befoe going to start investing in Share Market.

Decide on an Investment Approach

When you invest your money in the stock market or in another asset, there are some different approaches you can take.

To make a better investment approach, you can follow the below-mentioned simple steps to get your money into the market for profit.

You can manage the money yourself with a full-service broker and simply have an investment advisor to manage your money or you can choose an Algorithm.

  • Managed Investment – Managed investment accounts usually carry high fees. Further, handing over investment decisions to an advisor isn’t the right approach for many people.
  • Self-Managed Investment – You can choose a self-managed investing approach because it gives you the confidence & full control over your money & investing.
  • Algorithm Investment – Investing with Algorithm, which means an algorithm picks diversified investments for you based on your risk profile and investment goals. While investing with an Algorithm sounds simplest, but there are fees associated with automated financial advising. However, fees associated with Algorithm Investing is lower than if you have human advising you.

When you are ready with your investment goal and approach. Let’s move towards Share Market.

What is Stock Market?

stock marketequity market or share market is the aggregation of buyers and sellers of stocks (also called shares), which gives ownership of businesses; these stocks may include securities listed on a public stock exchange or offered via Initial Public Offering (IPO).

How to Invest in Share Market?

As a beginner investor, the process of trading and investing in share market can seem a bit complicated & confusing. It requires you to open certain accounts and fulfill certain formalities before starting stock market investments. If you are looking to invest in the share market, you don’t have to look any further but reading the following step-by-step guide by which you can start share trading in no time.

Learn, How to Invest in Share Market in 10 simple steps:

  1. Get a PAN Card
  2. Choose a Broker
  3. Open a Trading Account
  4. Open a Demat Account
  5. Make an Initial Deposit
  6. Decide how much to Invest
  7. Know Depository Participant
  8. Know Stock Exchanges
  9. Buying & Selling
  10. Instrument Traded on Stock Market

1. Get a PAN Card

If any want to carry out any financial transaction in India the primary requirement is PAN or Permanent Account Number. Permanent Account Number is unique 10 digits Alpha-numeric number assigned to an individual by the Tax Authorities of India for assessing their tax liabilities.

Nowadays PAN is required for opening a bank account, investing in Shares, mutual funds & other financial instruments, filing Income Tax returns, etc.

So, the most and first thing you will require to be able to start investing in Shares in India is a PAN card, you have to get it first.

2. Choose a Broker

You, me and anyone else cannot directly go to the stock exchange for buying or selling stocks/shares.

If anyone wants to buy or sell the shares on the share market that can be through only Stock Brokers because only Brokers are authorized to buy and sell the shares on Stock Market. Brokers are registered and licensed by SEBI (Securities and Exchanges Board of India). These Brokers can be an individual or company (Online or Offline).

If you are comfortable with the Internet better to choose an online broker company to get easy access to Share Market.

If you’re going to invest funds yourself, there are a huge number of  Brokers both discount brokers & Full-Service Brokers are available to choose from. You should pick a brokerage that fits your requirements and situations.

While choosing a broker, you should keep the following points in mind:

  • Compare brokerage fees (you’ll pay for buying and selling assets)
  • Minimum deposit requirements
  • Types of investments available
  • Trading platform. 

You should select a broker that offers low commissions or free trades with plenty of commission-free investments, and an online platform that provides education on Investments if you’re a beginner.

3. Open a Trading Account

Once you have a broker, you will now need a Trading account. A Trading account allows you to buy or sell shares through a Broker on the Stock Exchange. Trading account will be like an intermediary between buyer & seller, who facilitates the buying and selling.

4. Open a Demat Account

Once you’ve decided on your approach, it’s time to open a DEMAT Account. DEMAT Account gives you the liberty to invest your money in Stock Market, Mutual Funds, Exchange Traded Funds (ETF), Commodity, Equity, etc.

When you apply for a Trading account to a Broker, Trading account and Demat account will be opened simultaneously as it is one without the other is useless for investing in shares in India.

Demat account is just like a bank account. Bank account holds your money safely and keeps all transactions record and here Demat account holds your shares and these shares will reflect in Portfolio.

You cannot hold shares in physical form or store them physically after DEMAT introduction by SEBI. They have to be in a Dematerialized state or Demat state as per existing rules by SEBI. A Demat account does that for you.

The buying and selling will take place from the Demat account and it will reflect in your Demat statements that you receive from Broker time to time.

I hope you got an idea about What is Demat Account. If you want to know the Demat Account Opening Process than you can read the guide on How to Open Demat Account.

5. Make an Initial Deposit

After opening your DEMAT account, you’ll make an initial deposit to start Investing, usually through a transfer from your bank account. There are generally no fee will be charged for this transfer, or you can also send in a check if you’d prefer.

You can deposit money to your DEMAT Account by following options:

  • Net Banking (instant transfer from your linked account)
  • Cheque

As I told you earlier in this article that you can make an investment on different types of assets through DEMAT Account, you can put in as much money as you want to.

6. Decide how much to Invest

How much you should invest depends on your investment goal, when & how you need to achieve it. The most common investment goal is retirement. If you have a retirement plan opted at work, like Provident fund (PF), National Pension Scheme (NPS) then your investing milestone is easy to achieve. You should contribute at least enough to that account or plan to get the full benefits.

As a general thumb rule, you should invest a minimum of 10% to 15% of your income each month/year for retirement. You can choose more monthly or weekly investment options to achieve your other investing goals because of the availability of plenty of Investment Options in India.

7. Know Depository Participant

There is also a Depositary Participant that you need to be aware of.

There are two depositories in India: NSDL and CDSL which stands for:

  • NSDL – National Securities Depository Limited – NSDL, the first and largest depository in India, established in August 1996 and promoted by institutions of national stature has established a state-of-the-art infrastructure that handles most of the securities held and settled in dematerialized form in the Indian capital market. (source –
  • CDSL – Central Depository Services Limited – CDSL, facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry through its Depository Participants (DP). Central Depository Services Limited works for Bombay Stock Exchange and promoted by State Bank of India (SBI), Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Axis Bank and the Union Bank of India. (source –

These two have their agents in the form of Depository Participants who will provide an account to store the shares you hold.

It is not the same as Demat and Trading account as in Demat it shows the number of shares you hold and the Trading reflects the buying and selling that has taken place in your account. Depository Participants will hold those shares you bought and release the shares you sold.

However, it is usually taken care of by your broker who will also guide you about the Demat, Trading account opening process as well as register with a Depository. But you need to be aware of it none-the-less.

8. Know Stock Exchanges

There are two main stock exchanges in India that offer to trade on five days a week except for National Stock Exchange Holidays and Bombay Stock Exchange Holidays.

  • BSE – Bombay Stock Exchange – BSE was established in 1875, is Asia’s first & the Fastest Stock Exchange in the world. Bombay Stock Exchange is operating from the last 141 years since 1875 and facilitating the growth of the Indian corporate sector by proving it an efficient capital-rising platform. Popularly known as BSE, the organization was initially established as “The Native Share & Stock Brokers’ Association” in 1875. (source –
  • NSE – National Stock Exchange – The National Stock Exchange (NSE) is the leading stock exchange in India and the fourth largest in the world by equity trading volume in 2015, according to the World Federation of Exchanges (WFE). It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on annual reports of SEBI. (source –

The buying and selling take place in these two exchanges.

These are the only two main exchanges in India where buying and selling of shares, commodities and other trading instruments take place. You need to mention the exchange to your broker too, as there is usually a slight difference in the price of shares at the two exchanges.

However, your broker can guide you here in case you do not understand where and what to trade.

9. Buying and Selling

For buying or selling shares, you need to inform your broker about which share in what quantity you wish to buy and at what price.

For example, if you wish to buy 10 shares of State Bank of India when it reaches a price of Rs. 294, you have to inform the same to you broker; Buy: State Bank of India. Quantity: 100, Price: 294.

In the case of an online broker, you have to inform your broker for buying and selling, they usually have customer care numbers where you can place your order if you do not have access to the Internet at that point. The transaction will be made on your behalf when the share reaches that price.

The same is done in case of selling, for example, Sell: State Bank of India, Quantity: 20, Price: 296. The sell order will be processed when the share reaches that price.

However, the buy and sell orders remain valid only up to a certain time, usually the same day or the next. Your stockbroker will inform you of the same. If during that time frame the buy or sell price is not reached, the order is canceled and you need to place a new order.

10. Instruments Traded on Stock Market

Along with the Share Trading of listed companies, other instruments also traded on Stock Exchanges. These instruments are:

  • Equity
  • Derivatives: Futures & Options, Foreign Indices
  • Mutual Funds
  • Currency Derivatives
  • Fixed Deposits and Bonds
  • Initial Public Offer (IPOs)
  • Gold Exchange Traded Fund (ETF)


That is all the primary thing to know before going to start investing in Share Market. There are a lot of things to learn to become a full-time stock market investor.

If you’re saving money for a goal and won’t need the cash for some period of time, the money should be invested. Unfortunately, many people are afraid to invest in any means or don’t do it because they don’t know how to start investing.

The good news is, investing can be easy, and you don’t have to know a lot about the stock market & other investment options to make wise investments. If you are new to share, you can learn here – How Share Market Works.

As a beginner to the world of investing, you may have a lot of questions like How do I get started investing? Here was my guide that explained how to invest in Share Market.

If you want some Share Market Tips than you should read my another guide on the Best Stock market Tips.

Thank You for reading.

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