Which stock broker to choose? What are the things to be kept in mind with the stock broker? How to choose a stockbroker?

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 While investing in the stock market, the biggest question is which broker should we choose. Today we will discuss the same in this article. In the last few years, the number of investors making direct investment in the stock market has increased.  This year 2022 the total number of demat accounts has reached 10 crores.   Many brokers have come in the market. Most of the new brokers are start ups. At this time of competition, the brokerage rate has come down a lot. Choosing the right one from so many brokers is a very difficult task. Which broker should we choose, full time broker or discount broker? There are many questions that we should pay attention to when choosing a broker. Let us know what are the main points that need attention.

Are you a trader or investor?

First make sure whether you want to trade or invest, if you want to trade then choose a discount broker. Investor should go with full time broker. In trading, you buy and sell stocks repeatedly, so to save brokerage, go with a discount broker who charges you 15 to 20 per lot. You can save a huge amount of brokerage with a discount broker.

Always check whether the shares have come to your depository account or not.

Check your demat account after T + 2 (trading + 2 days) day of buying stocks, stocks should be in demat account after T+2 (trading + 2 day) day. The trading account is with the broker and the demat account is with the depository. CDSL and NSDL are the two depositories in India. If this does not happen, then immediately ask the broker to transfer the stocks to your depository. If the broker makes the same mistake again and again and you have to get your stocks transferred by email or phone every time, then change your broker. Do check your demat account once a week. 

Keep the power of attorney information.

At the time of account opening, the broker takes a signature on the power of attorney from you, after that whenever you sell the stock, it deducts the stock from your demat account. Which can be used in a wrong way and many such incidents have happened. Today you can open an account without giving power of attorney. And you can sell your stock by using CDSL TPIN. If you are opening an account by filling offline, then do not sign the POA form. In online mode you have to send POA (Power of Attorney) form by post or courier. If you want non POA account then don't sign the form. 

Don't get lured by margin.

If the broker tells you to buy shares by giving tips or greed of margin, then never do so. Margin allows you to buy stocks for more than your deposit. If margin is 5x then you can buy 50000 stocks for intraday by giving 10000. Which can be risky. If you do not set a stop loss, then you can suffer more losses if the stock falls further. Whatever you do in the beginning, do it in the cash market and with your research. Make yourself so experienced with learning that you don't need tips. Always buy stocks for delivery. Otherwise mutual fund is right.

Check the statement of depository account to stock pledge.

You can also check in the depository that your pledged stocks are new. Many times the broker pledges the shares without your knowledge or keeps the shares in the trading account without transferring them to the depository. By doing this he takes margin from these stocks and can use it to give margin to other traders or can use the fund elsewhere. KARVY's demat scam is an example of this, KARVY had taken a loan of 2300 crores from the bank by pledging the securities of 95000 customers without their permission.   

The trading platform of the broker should be excellent. System should not hang, no GLITCH should come while buying stock. 

Tell us by commenting what kind of service your broker gives you. 

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