I have been in stock market for quite a long time. I still remember the times when my father used to visit broker office to place order and watch movement of shares he held.
Thanks to exponential growth of internet usage in India, more and more traders started using online method of trading and nowadays it is very hard to see people visiting broker office.
This led to new type of stock brokers in India, known as Discount brokers. These kind of brokers were accepted by younger generation who were tech savvy,
Let us understand more about discount brokers and about Top discount brokers of India.
Who are Discount Brokers?
Discount brokers was very established concept in western countries and introduced to India bb Mr Nithin Kamath through his broking firm Zerodha.
Discount Brokers charge relatively lower brokerage compared to full service brokers. To reduce the operational cost, most of their customer support is online. They pass on the cost benefit to customer resulting in savings to client.
They just maintain the infrastructure which is bare minimum to assist the client to execute his trades. Normally they don’t have any research team to advise the customer on investment.
I have seen people get investment advise from full service brokers like Sharekhan, ICICIDirect and Angel Broking etc but execute them through the discount brokers to save on commissions!
Some of the Best Known Discount Brokers in India are like Zerodha, Upstox and Tradejini.
In this post, I am listing down some of the Pros and Cons of Discount brokers and brief introduction to few of the Top discount stockbrokers of India.
Advantages of Discount Brokers:
- The biggest advantages is for traders who frequently trade in stock exchanges like NSE and BSE. They can save tons of money by using discount brokers. Usually full service brokers charge percentage based commission. These usually range from 0.1% to 0.5% for delivery. Whereas discount brokers have flat of around Rs20 irrespective of size of investment. And some brokers like Zerodha and Upstox charge Zero for delivery trades.
- Discount brokers does not provide advisory services. That means they wont give any recommendation to buy or sell any shares. In my opinion, it is a blessing in disguise as most of the advises that given out by full service brokers are marketing gimmick and intended to make you trade more so that they can generate more brokerage..
- Offcourse, established discount brokers are more safer than smaller full service brokers who have presence only in few towns.
Disadvantages of Discount Brokers:
- Limited Support : In full service broker, one will be provided with a Relationship Manager (RM) to support for all your needs. But with discount brokers, there is no dedicated RM
- No advisory : If you are looking for stock buy or sell tips, discount brokers does not provide that. However they have some education initiatives like Zerodha Varsity.
- You may not be able to invest in schemes like IPO, FPO etc
Who are the Best Discount Brokers in India?
I am listing down Top 5 Discount brokers in India below,
As I mentioned previously, Zerodha is pioneer in introducing discount brokerage concept to India. It started its operation in year 2010 from Bangalore.
Their brokerage structure is Rs20/trader for intraday trades and Future and Options. For investment (delivery) they charge no fees.
Kite is the trading platform offered by them for trading and investment purpose. The most interesting part is this platform is developed by Zerodha themselves (most of the established brokers use the third party platform like NEST). Zerodha Kite is considered as one of the best trading platform of India today.
Upstox is one of the leading discount broker of India with headquarter at Mumbai.
They was earlier know as RKSV named after its founders, Ravikumar, Raghukumar and Shrini Vishwanath.
Initially it had monthly unlimited brokerage plan of Rs1947 but followed the Zerodha’s path to offer Rs20 per trade and zero investment scheme.
3) SAS Online:
Probably the cheapest discount brokerage rate offered by SASOnline. Its brokerage plans are Rs9/trade.
It also has Rs999 unlimited trade plan. It is based out of Delhi.
For commodities the unlimited trading is for Rs499.
One can opt for either Rs9/trade plan or unlimited trading plan
Tradejini is based out of Bangalore. It also offers Rs20/trade plan.
The best part of Tradejini which I liked the most is, they offer unlimited trading across all segments for the first month.
It will help the clients to get used to their tools and support mechanism without paying any brokerage.
Trade Smart Online is discount brokerage arm of VNS Capital Services. VNS is active in capital markets since 1994.
They are based out of Mumbai. They provide very high margin exposure upto 80x.
Their brokerage plan is Rs15/order which is relatively lesser than popular brokers like Zerodha and Upstox.
Basically discount brokers are like do-it-yourself(DIY) type of brokers well suited to younger generation of India.
They are becoming very popular with the investor who invest using their own knowledge.
What I suggest you to talk to each one of the discount brokers and try to understand what they have got to offer you. But always stick to good brokers with reputation.
You can also read my reviews of each one them as your starting point.