How to Invest in Share Market

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

Without wasting time, let’s start!!!

What is Share 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).

Why to Invest in Share Market?

Well, this guide is all about how to invest in the share 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 then you can read my other 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 does Share Market work? How to Invest in Indian Stock Market? or What is the assets or Financial Instruments being traded in Stock Market?

Don’t worry, everything is explained in the Share Market Basics guide.

But here, instead of jumping right into the Stock market is not good in my opinion. You should decide on an investment goal and approach before going to start investing in Share Market.

Decide 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 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 are lower than if you have human advising you.

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

Invest in Share Market in India in 6 simple steps:

  1. Get a PAN Card
  2. Choose a Broker
  3. Open a Demat & Trading Account
  4. Make an Initial Deposit
  5. Decide how much to Invest
  6. Buying & Selling

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.

Moreover, you’ll also need a bank account to deposit and withdraw money into your DEMAT account. But I consider you have one and that is why not including in the list.

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 firm that fits your requirements and situations.

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

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

Bonus: 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 Demat & Trading Account

Once you have selected 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. The trading account will be like an intermediary between buyer & seller, who facilitates the buying and selling.

Next, you’ll need a DEMAT account to hold these shares. 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.

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 (Dematerialization) 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.

4. Make an Initial Deposit

After opening your DEMAT and Trading account, you’ll need to 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 Bank Check if you’d prefer.

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

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

5. Decide How much to Invest

How much you should invest totally depends on your investment goals, when & how you need to achieve them.

The most common investment goal is retirement or big expenditures like self-marriage, children’s education & marriage.

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.

6. Buying and Selling

For buying or selling shares, you need to inform your broker that which share in what quantity you wish to buy 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 by accessing their website or app. They usually have customer care numbers also 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.


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 in 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 the Share Market.

Again I’ve mentioned some Share Market Tips that you should follow to achieve your goals.

Thank You for reading.

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