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Topic 05 · 7 min read · India-specific

How to start investing

This is the part most sites skip: the actual process. Pick your track.

I’m under 18 ↓ I’m 18+ ↓

Track I — If you are below the age of 18 (minor)

  • As a minor is not considered to have the ability to make informed decisions on his account, all minor investments must have a specified “Guardian” responsible for managing the minor’s investments.
  • The guardian is required to submit all the necessary details and documents such as bank details, PAN number.
  • The guardian will make all the payments, but the ownership will solely lie with the minor.
1

Choose the right account

  • You can open a Minor Demat and Trading account. For example, platforms such as Zerodha offer dedicated minor accounts (Demat Accounts) with zero maintenance charges.
  • Many big banks such as ICICI Bank and HDFC Bank (Bank Account) have special “Kids” accounts.
2

Learn basics

3

Start simple

  • Start investing small amounts of money in “too-big-to-fail” companies or companies with a proven track record of being safe to invest in.
  • These companies usually have:
    1. Stable earnings
    2. Established products
    3. Better reputation
    4. Lower chances of suddenly failing
  • You can also use financial data and performance such as how much money it makes before taking any decisions. You can use sources such as StockAnalysis.com or Yahoo! Finance.
  • Before starting, one can use paper trading or virtual portfolios. This means pretending to invest with fake money. One can use websites such as TradingView, Investopedia Simulator or Moneybhai.

Track II — If you are above the age of 18

1

Open the required accounts

  • In India, you usually need:
    1. PAN Card
    2. Bank Account
    3. Aadhaar
    4. Demat + Trading account
2

Open a brokerage account

  • To buy stocks, bonds or mutual funds, you need an authorized brokerage or investment platform.
  • In India, you can use platforms such as Zerodha or Groww.
3

Learn basics

  • Understand:
    1. Stocks
    2. Risk vs return
    3. Compound Growth
    4. Diversification
  • You can also get guidance from sources such as:
    1. Registered Financial Advisors
    2. Regulatory and Educational Platforms
    3. Financial Literacy and News Sites
  • One can also learn from online videos such as these. Tap a thumbnail to open the video on YouTube in a new tab.
    Beginner guide YouTube ↗ Investing basics YouTube ↗
4

Start simple

  • Start investing small amounts of money in “too-big-to-fail” companies or companies with a proven track record of being safe to invest in.
  • These companies usually have:
    1. Stable earnings
    2. Established products
    3. Better reputation
    4. Lower chances of suddenly failing
  • Before starting, one can use paper trading or virtual portfolios. This means pretending to invest with fake money. One can use websites such as TradingView, Investopedia Simulator or Moneybhai.

After reading — what you can do today

  1. Before even starting, they can find proper sources of money such as asking parents for allowance, doing small works that can earn them money, etc.
  2. Read and follow financial news from trusted sources such as Pulse by Zerodha, The Economics Times, etc.
  3. Use stock market simulator apps to practice investing money.
  4. Start investing small amounts of money with the help of parents.
  5. Start tracking their investments, spending and saving.

Next: Risks of investing →