Online Trading Using SBICapsec Account – Part 1

Given the recent downtrend in the Indian stock markets and with various stocks available at dirt prices, a lot of people are thinking of entering into the equities market. And why shouldn’t they? After all everyone wants to make money and cash in on the ‘India Growth’ story. So what has this blog to offer to all you future traders, investors or may I say the future Jhunjunwalas and Warren Buffets of India? This article is an introductory part to a series of blogs that will help someone wanting to trade or invest in the Indian stock market to take their first baby steps, viz.,opening trading and demat accounts and trading online from the the comfort of your home.

In this part I intend to focus on opening a online trading and demat account with State Bank of India Capital Securities, popularly known as SBICAPSEC. Why SBI? Well, there are two reasons: 1) I think SBI is the most progressive among the PSU Banks in India 2) and simply because I have used only SBICAPSEC for trading shares. My personal experience has been one that of mixed feelings. I say that because even though the process of opening SBICAPSEC trading account is fairly simple, the information they provide regarding how to use it is scattered and not easily available. To guide you through this process I have compiled all related information at one place thereby making it easier for other people. Now, without any further delay let’s get started.

Step 1: Opening a 3-in-1 trading, Demat and Savings Net banking Account 

SBI offers this 3-in-1 account opening and integrates your monetary (savings) account with your trading and demat accounts. For those who don’t know what a demat account is, refer to the DEMAT wikipedia page. It is now mandatory for everyone to have a demat account in order to trade shares. Basically, Demat account is the account where your shares are stored electronically. So to open this 3-in-1 account go the SBICAPSEC website, click on the ‘Open Account’ at the top right hand side and fill in your name, phone no., email address (you will need one for net banking) and nearest city. Someone from SBI will get back to you by phone or email. Or you can directly visit the nearest SBI branch that has demat facility.

The documents you will need for opening these accounts are:

1) proof of identity (copy of PAN Card),

2) proof of address (copy of passport or ration card or voter’s ID or driving license or landline telephone bill),

3) bank proof (copy of pass book/personalized cheque leaf) if you already have an account with SBI, and

4) 3-4 recent passport size photographs.

These days SBI branches have ‘agents’ who help people open these accounts. The first thing this agent will do is open a savings account for you and activate Net Banking on it. This process varies with the branch location and takes atleast 2-3 business days. You have to follow up with the bank on the status of your application. All PSU banks have natural tendency to procrastinate their work. For net banking you will have to deposit some cash in you savings account (I deposited 3000 rs). You will then get a netbanking user id and password with instructions to logon to your online account. Make sure you ask for ‘transaction rights’ to your account, not just ‘viewing rights’.

The agent will then ask you to fill the demat and trading account forms. After submitting the Demat account form, you will get a welcome kit, most probably within 10 business days. The welcome kit will contain a welcome letter providing details of your account, a product manual of Demat services and delivery instruction slips with client master list. The Demat account number (BO-ID) will be provided to you through e-mail or SMS if you have mentioned your mobile no. and e-mail ID in the application form.

Once you have all you account details, you can go to the SBICAPSEC trading website. If you haven’t received your trading and login passwords yet but have your demat account number and client code then click on forget password and new login and trading passwords will be sent to you by email. Remember that you login password will keep changing every 14 days. The trading password remains unchanged.

In the next post I will give a detailed tutorial on using the Trading platform.

If you have any questions just comment on this post and I will try to answer them.