In recent years, opening an account (Trading and Demat) for investing money in the Stock Market has become more simplified, easy and with no paper work. Because of this, new individuals can now easily start trading stocks in india.
However, I have noticed one thing several times that new individuals are not caring about how much money they should invest and start with to earn any good amount in Share Market.
There are many investors who have started by investing just ₹50 or below in a single share. Even, there are some individuals who are creating portfolio of 10 stocks with just ₹500 or something similar!
Dear investor, this is absolutely a wrong thing if you are doing this or was thinking about doing similar!
Investing ₹50 or even ₹100 in a single stock will be like you just opened your account to make your Depository Participant (DP) richer!
Charges that will have to be paid if you want to trade in Indian Stock Market
When you buy a share (any quantity) of a company whether it is trading around ₹1 or ₹10,000, you are charged with some fixed charges.
You will be charged for Brokerage, STT, Transaction charges, stamp charges, DP charges etc. With whom you opened your account will levy all these charges when you buy and sell your shares, except DP charges which are levied only when you sell a delivery based stock. These different charges will be automatically deducted from your account.
(If you buy a stock today and don’t sell it on the same day, then this stock will become a delivery based stock. You can sell them only after T+2 days. Here T means that day when you bought the stock).
Except DP charges, other charges mentioned above are almost negligible and you wouldn’t need to care about them. But you will definitely feal the pain of DP charges if you buy shares worth only Rs 100.
If you buy a stock and sell it after few days or beyond that, by doing rough calculations, i can say that you would be charged between ₹15-30 (at the time of selling your shares) as DP Charges. This charge is levied when you sell a delivery based stock.
Whether you buy a single share or thousand shares of a single company, if you sell them after your purchasing date, you will be charged for the DP Charges.
In case, you buy a share and sell it on the same day (known as intraday trading), then you would be charged with lower amount as you will don’t have to pay DP charges.
Beside of above mentioned charges, brokerage firm (with whom you open your account) also charge you for Account maintenance charges which may be vary above Rs 200 per year.
How much you will have to pay in total for trading in indian stocks?
Approximately, you will be charged around Rs 20 in total when you buy and sell a delivery based stock in india. If value of your shares are quite high, than you would be charged with more amount also. It is because the DP Charges remain same in case of any quantity and value of your shares. But charges like brokerage, STT and other goes up simultaneously as per value of your shares that you buy and sell.
(If you are feeling demotivated and doesn’t want to invest in stock market anymore after knowing about these charges, then click here to read something which will really motivate you again😃)
Overall, i would say that investing just few hundred rupees in stock market is not a great idea at all. You will lose all this in just paying charges.
So, how much money we actually need to start trading stocks in India?
Ideal amount to start investing with in the Indian Stock Market
See there is no minimum amount that is required to invest in Indian shares. But considering all the charges, i think any new individual should start investing trading in stock market with atleast ₹10,000.
If you started with this amount, you will hardly feel the pain of charges. However, if you made too many Buy and Sell transactions, than ₹10,000 will also be a small amount for you. So, avoid making too many transactions.
If you are thinking about investing your money in just few stocks and expecting that you will not sell your stocks within a few days, then you may also start with Rs 5,000.
But if you really want to earn some good amount of money from stock market, then i will suggest you to start with atleast ₹10,000.
.
.
.
.
At last, remember that it is not like you can invest any small amount in indian stock market! To cover charges and earn something good, you should ideally start with Rs 10,000.
By the way, it will be a good decision if you practice on virtual Stock trading platforms before you invest your real money in stock market.
Now, I am ending this article.
Hope you make Great money in stock market.
Good Luck : )
