Save Your Brokerage
Today my one of a friend asked me about the best broker in India. Because he is paying high brokerage than me. As I am Paying just 20 rs. per call and he is paying 0.70 per share.
That’s why I have suggested him For Zerodha. So he asked me why Zerodha? Because there are so many others too.
That’s why I explained him in detail that how Zerodha – a discount broker can help him to cut down his unnecessary expenses.
Let’s discuss the difference between full-service brokers and discount brokers.
Zerodha is Bangalore based company. They are the 3rd largest stock broker in India in terms of Active Clients. It is flat free share broker for trading in Equities, Commodities, Currency Derivatives. It is the Fastest growing and largest discount broker. It has more than 7 lakh clients compared with just 2.6 lakh in last financial year.
It is offering stock and commodity trading on flat rs. 20 or 0.01% / 0.1% (whichever is lower) per executed trade. And It is charging rs. 0 (free) on every equity delivery trades.
Pros and Cons of Zerodha. See below
|It has Best in the industry trading platform and tools.||3-in-1 trading a/c is not available at Zerodha.|
|It offers Equity delivery trades for Free.||Online IPO is not available at Zerodha|
|It does not charge any hidden fees, i.e. software uses charges.||Calls and Trades are not Free. It is available with additional 20 rs.|
|No min. Balance is required to open trading a/c with Zerodha||Zerodha Back office is not integrated with trading platform|
|Zerodha Referral Program is open for every client. They can get 10% of brokerage paid by people you refer.||Margin against shares not available in equity cash segment.|
|It has branches and franchises in almost every big cities like Hyderabad, Pune, Ahmadabad, Bangalore, Etc.||GTC & GTD statement not available at Eq segment. It is only available for commodities trading.|
|Zerodha number of customers are above 6 lakh and it has 8% of daily retail trading volume across NSE, BSE, MCX.||Trading Software is not available Mac & Linux operating system.|
Along with discounted Broker – Zerodha, there are many full-service brokers – ICICI securities and HDFC security. So Let’s compare all 3 to know who is the best for you.
|HDFC securities||ICICI Securities||Zerodha|
|The 3-in-1 a/c, i.e. HDFC bank a/c, HDFC Trading a/c, HDFC Demat a/c is the best offering for retailers.||It is also offering 3-in-1 a/c which is easiest way for investments.||It is not providing 3-in-1 A/c.
But it is providing Free Equity Delivery traders.
|It provides easiest way to invest in the Stock market.||Wide range of investments options available on one portal.||Excellent Trading Platforms made available Free for all customers.|
|GTC (good till cancellation) and off-market hours order placement facility is very useful.||10% referral credit for referring new customers.|
|HDFC Securities||ICICI Securities||Zerodha|
|In addition to opening trading a/c with HDFC securities, it is required to open Savings a/c too. (with min. 5000 bal.)||It is charging highest brokerage in comparison with other retail Brokers.||It does not provide stock tips, research reports or recommendations.|
|Very high 'minimum brokerage' of Rs 35 per trade or 2.5% of the trade value whichever is lower.||Doesn't provide options to invest in IPO, Bond and NCD public offers.|
|Call & trade cost extra Rs 25 per call after first 20 free calls in a month. Even they charged as per share 0.05 to Rs. 10 which is very much huge for small investors.||Calls & trade are chargeable with additional 20 Rs.|
So this comparison can help you to decide that which broker is best for you to make investments.
Because if you choose other brokers than discount broker then this kind of situation can occur with you too.
As Mr. Desai has invested 50k with Zerodha in Equity and 15K in commodities.
So in that after the whole year trading, he was charged just 20 rs. in each trade, while he is doing intraday trading in equity. then his brokerage with Zerodha is around 4000 with service tax.
But just imagine if he has traded with Full-Service Broker then they are charging around 0.05 paisa. so his total brokerage is around 18000 which means investing
with Zerodha you have saved your 14000 rs. from brokerage only.
Let’s take a look,
So in the same way when he has invested in commodities with 15 k in Zerodha. he was charged same 20 rs. and after whole year’s trading, his brokerage is around 5000 with service tax.
But if he has traded the same thing with the same volume with other Full-service brokers then he was charged around 0.03 paisa. And his brokerage according to his volume is around 14000 to 15000.
So as he traded with Zerodha he has saved his 10000 rs.
Let’s take a look,
Now I hope you understood that how the trading with the Discount Broker is impacting your portfolio a lot.
Just give a thought that if you invest this 25k (15k from equity’s brokerage and 10k from commodity’s brokerage you saved) for compounding for 20 years with CAGR of 20%. Then you can save around 36.46 lakh.
This is how Discount broker and Full-service broker brokerage cost impacts your portfolio. That’s why investing with the discount broker you can save the unnecessary expenses that you can add to your portfolio and let it compound for the long term.
See How Saving a brokerage can compound your portfolio immensely…
Now tell me, what you will suggest to your friends or colleagues who are investing in this market.