In the fast-growing world of financial technology, stock markets have grown exponentially. About 15,000,000 new investors have joined the stock market since March 2021. Trading account and demo account are two main components of stock trading, but what is demo account and what is the difference between demo account, demo account and trading account? In short, the trading account is where you keep a portion of your money that you want to invest, while the demat account is where you keep the stocks and other investments you have purchased.
As the number of investors increases rapidly, so does the risk of some malpractice. Some of the common fraudulent practices that an investor should be aware of are:
Throwing lost gold for money: Many traders step in to sell small stocks, fraudulent banks and other improper actions to deceive you into investing for higher returns, but this never happens.
Try to play with your mind: Real estate agents often try to seduce you by focusing on your ethnic group, gender, social status, religion, etc.
Unnecessary Payment: They often accept prepayment for items that will arrive, but they never arrive. Also, they can charge exorbitant fees to open the account.
Power of Attorney (POA): Brokers can take a power of attorney from investors for trading and then use it for their personal interests.
The Securities Bureau of India (SEBI) and Reserve Bank of India (RBI) regulate and deal with these issues and bad practices. However, it is not enough that we only trust the governing bodies, we must also be careful on our part. So what can we do to avoid being scammed and losing our hard-earned money? Here are some guidelines to follow to enter the world of investing in the stock market, which will save you from these types of scams:
The demo account opening fee is usually between 0 and 300 rupees. If your broker is charging more worrying fees than that, be careful and look at the offers of other brokers as well.
Avoid granting a power of attorney because granting a power of attorney to your broker is not mandatory for SEBI. Even if it is mandatory with your broker, read all terms carefully and make sure there are no gaps, then sign them.
Be careful when the mediator tries to be too friendly or personal with you, as they may try to deceive you later. The broker's professionalism is always an advantage.
Don't fall in love with the false promise of high returns. The stock market is not a magic wand, it takes time to make money legitimately and most of the time quick money is a scam.
Do your own research on the company's financial statements and management before investing, regardless of what information the broker gives you.
Keep track of all funds in your trading account and funds with your broker.
View daily account statements and messages sent by regulators and authorities such as CDSL, NDSL and SEBI regarding your investments and general guidelines.
Please keep your contact information up to date and available to your authorities and brokerage to continue receiving updates.
In conclusion, it is suggested that although the stock market is growing rapidly and the returns are attractive, it is important to be grounded and invest with caution. Although there are regulatory bodies such as SEBI to avoid bad practices, it is the duty of the investor to be vigilant and vigilant.
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