People are participating in the stock market to attain their financial goals for long-term and short-term financial goals. 3-4 years ago, investors used to deposit their funds in post office schemes, insurance policies, pension funds, and fixed deposits. These financial plans are sufficient to attain the pre-decided financial standards, but these grow with a less rate of returns that restrict investors to attain an extraordinary return.
The share market is a destination for all those investors who want to reach a high level of growth in terms of wealth creation. We have a number of examples in India and the world, who started their investment in the stock market with a tiny amount, and now they are at their peak. Every small and big investor can invest through an online demat account that is a prime element of the stock market.
A middle-income investor thinks about the minimum investment before buying any stock in the market. Here you will get to know certain concepts with regard to investment in the stock market.
Minimum required money to trade and invest in stock market:
In simple words, the stock market does not bound any investor in terms of investment money. Anyone can invest with the tiniest to the largest amount available to him or her. The minimum investment amount in the stock market can be the minimum price of any security. Various securities are listed with a price less than Rs. 10 with major stock exchanges like BSE and NSE. You can start your journey in the stock market with below Rs. 10.
If a newbie investor takes his/her steps in the stock market, then multiple things hinder them. The minimum investment amount is also a major issue that affects his/her decision.
If you are wondering how to open a trading account online, you just need to contact a stockbroker. A Demat account serves as a path between investors and the stock market.
Minimum amount to invest for newbie investors:
Just like experienced investors, newbies can also start their investment with a little amount. The stock market has no restrictions regarding it. They can buy the lowest priced stock even if it has a price of Rs. 5. It is a benefit for them to start with a small amount as they are not much familiar with market technicalities. To float their funds in the market, they also require a Demat account like other investors. These investors can also start their investment through mutual funds schemes that offer an investment with just Rs 100 through SIP plans. To invest in these schemes, the Demat account assists the investor to start investing with minimum funds.
Ways to invest with small investment in the stock market:
In the stock market, you have multiple options and ways through which you can invest. These ways can be direct stock market instruments and other market instruments. If you want to invest in a direct stock market then the following are the ways to invest:
- Stock market equities
- Government bonds and gilt-edge securities
- Short-term money market instruments like commercial papers, treasury bills, and other instruments.
- Derivative instruments
Among all these investment ways, you can start with any amount for stock equities and bonds, but short-term securities have large fund requirements that vary with the needs of government and corporations.
If you have a risk-aversing behavior, then asset management companies offer mutual funds to invest. You can participate in different schemes like equity mutual funds, open-ended and closed-ended mutual funds, bond mutual funds, and other schemes. If you invest through a single payment, then the minimum investment amount depends upon the value of NAV (net asset value) of one scheme and if you invest with SIP (Systematic Investment Plan), then various mutual funds offer an investment with just Rs. 100.
In nutshell, minimum fund requirement is not a constraint in a path of investment in the stock market. You can start from whatever you have in your pocket. If you have the knowledge to use an appropriate strategy, then you can reach the highest level of wealth.
