India has now become the world’s 6th biggest stock market and a look at the stock market today will tell you that it is performing like never before. In September 2021, Sensex hit the 60,000 milestone and the number of new individual investors has also been rising. According to a report by SBI, the number of individual investors increased by 142 lakhs in FY 2021.
Does that tempt you to invest in the equity market? If you do, however, feel discouraged because you don’t have a large amount right now to start your investment journey, here’s some great news – you can invest as little as Rs. 100 in the share market!
What is a stock market?
A stock market, like any other market, is a place where people buy and sell products which, in this case, are shares of publicly listed companies. It is a platform that connects the sellers to the buyers.
For example, if you want to buy shares of XYZ company, the stock market will help you connect with someone who wants to sell shares of XYZ company. The trading takes place through electronic medium. There are two major stock exchanges in India – the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
How can you invest in the stock market?
- You will have to open a demat (short for dematerialised) account and a trading account to start buying and selling securities of your choice.
- A demat account holds your shares and other securities electronically like your bank account shows your cash balance.
- A trading account allows you to buy and sell the securities of your choice in the stock market.
- When you choose a depository participant to open an account, make sure they offer trading in the NSE and the BSE.
- Once you have your trading and demat accounts in place, you can pick which stocks to invest in and start building your investment portfolio.
How can you invest Rs. 100 in the share market?
Equity shares trade on the market value, which varies daily. If you look at stocks to buy today, you will realise there are many scrips whose value may be below Rs. 100, so you can easily buy one or more of them.
There is no minimum amount required to invest in the stock market. You can even buy a single share at a time with a value of less than Rs. 100.
Some stock exchanges in other countries allow you to buy shares in fractions too, making expensive shares more accessible to investors, but fractional investing is not available in India. If you want to invest only Rs. 100, your choice of stocks to buy will be limited to those currently trading at or below Rs. 100.
A few things to bear in mind:
- You should pick stocks after careful research, even if you want to invest only Rs. 100. Look at the past performance of the company and also consider its future outlook.
- Equity investments are vulnerable to market volatility but can give good returns over the long run, so look at staying invested for the long term.
Conclusion
You can start your investments in the share market with Rs. 100; however, as and when you have funds available, you can grow your portfolio steadily. You can choose to plan your investments with the help of a financial expert. Investing in the right mix of products can help you meet your financial goals and with wealth creation.
