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How to Invest in Share Market Online

In today’s world, Stock investments are famous ways of earning wealth. The losses and the profits of the investor depend on his/her approach to investments. Hence, understanding how to invest in share market online is the key to your success as an investor.

As investment is the best and the safest way to ensure financial security and there are endless options available in the investment market but the stock market is the best one and mostly preferred by everyone.

Stocks increase your chances to earn goods and invest profitably. As with every kind of investment, the stock market also comes with some risks but with proper knowledge, you can reduce the risk factors.

So, it is important to understand how to invest in share market online.

Before jumping on how to invest in share market online, let’s see what a share market is.

What is the Share Market?

A share market is a platform where different companies sell some part of their ownership to get potential investors. For example, if a company issues 100 shares and you buy 10 shares, you own 10% ownership in that company. 

Broadly, the stock market is divided into 2 categories,

Primary and secondary market.

“The primary market is the platform where the companies launch IPO (Initial public offerings) for the first time”.

“The secondary market is the platform that offers the opportunity to buyers and sellers to gather and trade company shares and is governed by the demand and supply rules. Investors and traders are two major performers in the secondary market”. 

This article contains all the information that a beginner needs to know before investing in the shares market.

If you are a beginner, you must also have a clear understanding of shares before investing in share market online. 

Here is a brief explanation about shares:

What are the Shares?

Let’s understand shares in simple words. As a beginner, you must understand the process of how to invest in share market for beginners in simple words. Let’s start with shares.

When a regularly profiting company wants to expand its business and plans to launch any new product which requires a big investment, it tries to get a loan from the bank or try to raise money from some other ways that don’t require interest.

The best way to get the interest-free amount is to find partners and convince them to contribute some amount to the company. This can be done by issuing shares to the people. The amount of shares you buy determines the percentage of your ownership in the company and you will receive the profit made by the company according to your percentage of shares.

Intermediaries in a Share Market

In case you buy money from another shareholder, there are chances that many things can go wrong. Hence, there is always a regulatory body that ensures smooth and fair transactions and regulation of the shares.

In India, SEBI (Security and Exchange Board of India is the regulatory body that defines a particular process for the transection of shares with maximum safety. The intermediaries involved in this are:

  • Stock Broker – SEBI has strictly made the rule that the stock exchanges should be done only through registered stockbrokers.
  • Depository and Depository Participant – In the traditional ways, buy used to get the physical form of share certificates but with the introduction of online investment in the share market, the shares have become digitalize or dematerialized. All you need is a bank account to keep a track of your money, Demat account is needed for this purpose, provided by a depository participant.
  • Bank – Money is required to buy the shares and a bank account is required to carry out the transactions.
  • Clearing Corporation – This body is responsible to ensure successful transactions.

How to Invest in Share Market?

If you are planning the ways for the highest returns from the market, then investing in stocks and securities is the best option for you. It is the best opportunity for money generation because Long term returns from shares can reach up to 16%.

Although stock markets offer high returns it also leads to losses many times. So, understanding the basics of the stock market can save you from losses. Investment in shares comes with the risk of high market volatility, only a better understanding of share market investment can prevent you from taking unnecessary risks.

There is a misconception among the new investors that the share market investment involves a complicated process, but this is untrue. The only thing you need to do is open a trading account, a Demat account, and an investment amount. You can start with the smallest amount from Rs.500 to Rs.1000.

Some of the things you should know before investing in the share market. Share market investment provides high returns because of its power of compounding effect. A trading and Demat account is required to invest in the share market. It’s a purely hassle-free process and can be done very easily. Another thing to learn for how to invest in share market online is to learn how to open a Demat account online in India.

The stock market is a money-generating platform for you if you have a proper understanding of the stocks and gain lucrative returns. In today’s digital age, it is important to learn how to invest in the shares market online and this can be done with just one click of a mouse.

Follow the steps below to learn how to invest in share market online.

1. Getting a PAN Card

The very first for how to invest in share market online is to Obtaining a Permanent Account Number (PAN). According to government rules and regulations, PAN is the mandatory thing for making financial transactions of any kind. A PAN card is also used as a valid identity proof of the investors. The government uses PAN to assess your tax liability.

2. Open a Demat Account

When you planning and want to know that how to invest in share market online, opening a Demat Account is compulsory.

  • When you hold a Demat account or a Dematerialized account, your physical shares are dematerialized or you can say they get changed into electronic format.
  • When you open an online Demat Account, a unique Demat Account number will be issued to you. This number is required for share market transactions.
  • A Demat Account is like s simple bank account, where you can deposit and withdraw money anytime. In the same way, The number of shares you sell or purchase is credited or debited in your Demat account.
  • A Demat Account can be opened only with a Depository Participant (DP). A DP can be registered with National Securities Depository Limited (NSDL) or Central Securities Depositories Limited (CSDL), or both.

3. Open a Trading Account

Now, the next step to follow is to open a Trading Account.

  • You need a trading account for shares in stock markets. If you own a Demat Account and looking forward to purchasing shares online, another thing you need is a trading account.
  • The unique Trading Account number is required for purchasing shares online.

4. Register with a Broker or a Brokerage Platform

  • As a direct option for purchasing the stock from the share market is not available, you need to avail of the services from the broker.
  • A broker is a financial intermediary creating a link between you and the stock market. But you must make sure that the broker you are dealing with should be a Market regulator, Securities Exchange Board of India (SEBI) certified.

5. Bank Account

  • Purchasing shares online without a bank account is impossible. The Trading Account links the Demat Account to the bank account.
  • To purchase shares online, you have to make the order from the Trading Account. Then, the broker will proceed with the transaction for settlement in the stock exchange. Once the settlement is done, the shares will be transferred to your Demat Account. This process takes 2-3 working days. The necessary charges are deducted from the bank account.

6. Unique Identification Number (UIN)

  • According to the SEBI rules, investors need to get a UIN to create a database of all Market Participants and investors. Getting a UIN through Point of Service (POS) agents appointed by NSDL is a simple process.
  • UIN only comes into action when you are trading in capital of Rs.1 lac or more otherwise, it is not required.

The above-listed 5 steps are very important for investing in the share market online. When you initiate a purchase order, it is matched with a similar sale order in the stock exchange. Once the settlement is done, your Demat Account is credited with the purchased shares.

7. Documents Required for Investing in Share Market Online

While learning how to invest in share market online, you must also learn about the documents required. There is some important document you need to possess for investing in the share market online. The list is mentioned below:

  •       PAN Card
  •       Aadhaar Card
  •       A canceled cheque containing your name and bank details
  •       Proof of address of the investor
  •       Income Proof of the investor
  •       Passport size Photographs of the investors

Read More: How to Invest in Stock Market for Beginners

How to Invest in Share Market for Beginners?

If you are a beginner, you must know how to invest in share market for beginners.

Process of How to Invest in Share Market Online?

As discuss above, there are two types of share markets – primary and secondary, both have a different process. Before learning how to invest in share market online, Let’s have a look at the process for investing in these:

1. Primary Market (IPOs)

For Investing in the primary market, you must possess a Demat account and a trading account to apply online. Or you can also use your bank account to apply. But remember the number of shares allotted will depend on the IPO market response. After receiving all the applications, the company allots shares according to the demand and availability.

Another way to apply for IPO is through ASBA using your net banking account. ASBA is the

Application Supported by Blocked Amount. Here, the amount for which you have applied for shares in an IPO, will get blocked in your banking account instead of transferred to the company. The amount is debited after the share is allotted.

2. Secondary Market

In the secondary market the stock market we all know where investors buy and sell stocks. For investing online in this market, you must have a trading account, a Demat account, and a linked banking account. Follow the simple steps to invest in the share market online in the secondary market:

  •       Firstly, you need to open a Demat and trading account with a linked banking account.
  •       Then, Log in to the trading account
  •       Choose the share
  •       There must be enough funds in your account for buying and shares in your Demat account before selling
  •       Determine the price
  •       Wait for the seller/buyer response.
  •       Complete the transaction

The process is simple, but being a successful investor is not easy. There are many things to consider while investing in the share market.

Things to Keep in Mind Before Investing in Share Market

Now that you have learned the basics, let’s see what are other things to consider:

1. Understand Your Investor Profile 

Every investor is unique and so are his/her goals behind the investment. These three factors will help identify your profile as an investor:

  • Financial goals – Define your financial goals and get clarity on how and which stocks to invest in.
  • Risk Tolerance – How much risk you can tolerate? If you plan to invest in the stocks of a strong company, the price will be stable. But, if you plan to invest in a small company, every small achievement will increase the stock price and in the same way, failure will lead to the downfall of the price. You need to understand how much volatility you can tolerate easily and then invest.
  • Investment Horizon – As Stock investments can provide a good return in long-term investment. According to financial goals, investing in a particular stock.

2. Research about the Company

It is advised not to make investment decisions according to stock price only. Stock investment is a long-term journey. Hence, it’s better to invest in a stock that can be done with the long journey and generate good money.

You can easily find these stocks by just looking at the financial condition of the company. Simply try to find out if the company is financially strong and can tolerate any financial ups and downs that might happen. A strong and stable company attracts potential investors and a higher stock price.

3. Diversify

As stock investments involve market risks, it is advised to reduce the risk of your equity portfolio as much as possible. Through Diversification, you can attain this goal. Let’s have a look at the reason to follow this step:

  • If you diversify your investment across sectors and industries, you can save a huge amount of the investment from losses.
  • The Diversification of your investment across different cities can safeguard your investment money, in case if any haul happens in the city where the company is situated in which you have invested.

4. Track your Investments Regularly

As the stock market is highly volatile, the concept of ‘invest and forget’ is not a good choice, as an investor, you must keep a record of your investments. Tracking investment can provide you opportunities to sell and rebalance your stocks and get higher profits. You can cut down your losses by selling out the down falling stocks before they vanish all your money.

How to Invest in Share Market without Broker?

If you want to know, how to invest in share market without broker, then here we are with the full information.

You can invest through DSPP. DSPP stands for Direct stock purchase plan. These plans are the way of direct investment in the share market without the involvement of a broker and with the help of third-party transfer agents.

This investment option saves huge brokerage fees and commissions.

So, if you are looking for the answer to how to invest in share market without broker, The DSSP is the answer.


If you want to learn how to invest in share market online, firstly, you need to know about the SEBI-mandated rules. Choosing a trusted financial partner investing in share market online is another important thing. And, if you want to know how to invest in share market without broker, Understand the process of DSSP.

Frequently Ask Questions

Q1. How much to invest as a beginner?

Ans. There is no minimum limit of investment in the stock market. But, if you are a beginner, it’s better to start with few thousand bucks.

Q2. How do I get profit from the stocks?

Ans. The stock market involves a simple procedure. Companies sell the stock to generate investment from the market. These stocks are traded and their values vary according to market trends. If the company’s stock price rises, you will get a profit.  Another option to earn from stocks is when companies declare dividends.

Q3. How to invest in share market without broker?

Ans. You can do this by DSSP.

Q4. How to invest in share market online?

Ans. If you are looking for how to invest in share market online, follow the steps given above in the article.

Q5. How to invest in share market for beginners?

Ans. How to invest in share market for beginners is a very famous question among people. Firstly, it’s better to learn and educate yourself and set your investment limit. Then, you just start with a small amount and when you get confidence, you can start with big amounts also.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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