6 Things To Check When Opening Broking Account

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    Investment for future is seen a prime objective among today's youth not just in India but the idea is echoing amongst people across the globe. Investment for saving purpose in future is considered as a good idea.

    6 Things To Check When Opening Broking Account

    Today's scope of investment has seen a sea of change as compared to the traditional form of investment of cash in the land, gold, bank deposits and so on which was strictly followed by our forefathers. 

    One can choose from various types of investment options which includes - Bank Products, Stocks, Bonds, Investment Funds, Annuities, Options and so on.

    Investors cannot invest in stocks directly and hence one requires a platform to invest in the stock of the companies and one can implement the same with the help of broking firm.

    With the development of technology and the simplification of the software, usage has opened the doors to numerous investors who are ready to invest in a range of sectors ranging from infrastructure to pharma companies.

    Now let's understand what a brokerage account means.

    What is Brokerage Account?

    It is an account maintained by an investor. It is a kind of adjustment between an investor and a licensed brokerage firm, which permits the investor to deposit funds with the firm and place investment orders through the brokerage.

    The investor wholly owns the money in the brokerage account and he can claim the returns from it as a part of the taxable income from capital gains if in case he/she earn income from the account.

    It is a kind of taxable account. An investor can deposit cash into this account either by writing a cheque or by linking it to the respective savings account. Once the cash is deposited, the individual can use the money to buy different types of investments.

    In exchange for executing the buy and sell orders, the investor has to pay the stockbroker a fee or commission.


    The following are the six things to check while opening a Brokerage Account -

    Determine the Needs of the Investor

    The investor has to clearly analyze the needs and requirements and chalk out their investment goals, plans and the amount they are willing to invest in the stock market. After which it is necessary to zero in on a full-time broker or a discount broker to fit in their trading needs since brokerage is the firm that engages on buying and selling of stocks on behalf of the investor.

    A full-time broker is for those investors who are serious about their investment plans and on the other hand discount brokers are for those investors who are planning investment on a casual basis.

    Comparing the web-portals

    In today's digitized world, there are numerous companies which are currently offering online brokerage account. Before picking up on one particular brokerage firm, the investor has to compare the other brokerage firms which are present in the market and the kind of packages that they offer to their clients.

    Minimum Opening Balance Required for a Brokerage Account

    Each and every brokerage accounts have different opening balance requirements.

    Some brokerages may allow the investor to open an account with the smaller amount of money as long as the investor deposits money in the brokerage account regularly. If not they some brokerage will ask the depositors to deposit a minimum amount at the time of opening the brokerage account.

    Some set of brokerage firms do not charge an opening fee at the time of opening a brokerage account. Some brokerage firms do not charge brokerage fee during the initial days after opening a brokerage account.

    Reputation of the Stock Broker

    It is always better to choose a broker who has high experience added with a good reputation as they will have an edge over others and has an up to date knowledge of the inner workings and the trends of the market.

    By choosing a reputed stockbroker, you will be relieved that there will be no misuse of funds apart from assuring rich returns on the invested money.

    Cost Efficiency

    While opening an account with the brokerage firm, there will be generally different kinds of fees that the investor has to pay. The kind of fee ranges from account opening fee, transaction fee, maintenance fee and so on. It is always advised to choose a low transaction fee if you trade more often and go for a low maintenance fee if you prefer to hold the stock for a long period of time.

    Platform and Market Research Facility

    In today's technologically developed world, brokerage firms are increasing their capacity to utilize advanced technology through software development and various market research tools. By opening an account with a broker who has in-depth knowledge in this kind of software and market research tools will definitely fetch incentives for the investor to make an informed and timely based decision while choosing stocks.

    Read more about: account investment brokerage
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