I use Zerodha Broker for my trading and investment purpose. I opened the demat account with them way back in early 2012.
Zerodha started in year 2010 and I was little apprehensive about opening the demat account with them as they were literally unknown entity at that time. But they have always met my expectation since then and hence I am writing this review comparing its pros and cons.
Advantages of Zerodha Demat Account
I will list down some of the features which I like most with them and hence recommend them in comparison to other Stock brokers.
1) Zero Brokerage on all your Investments
Zerodha is the first broker to introduce Zero brokerage for demat account. Any delivery based transaction will have no brokerage. All the other trades like intraday and derivatives (Future and Options) are charges flat Rs20 per trade.
While the established brokers like ICICIDirect, Sharekhan etc were charging percentage brokerage, Zerodha’s introduction of Zero commission has set a new trend.
Just to give an example, if you plan to invest Rs 10 Lakh , with 0.55% brokerage (ICICIDirect charges this much!), you have to shell out Rs5,500 in brokerage itself where as you pay nil in case of Zerodha.
And ditto while you wish to sell those shares.
This point of discussion is for Investors, let us see now how Zerodha makes sense for Traders.
2) Maximum Rs 20 / Trade for all trades
While I was using ICICDirect, I used to pay Rs75 per lot options trading , so to buy 10 lots, I had to shell out Rs750.
I was trading Options in 2012 and when I heard Flat Rs20 for any number of lots, the offer was irresistible.
Many of my options strategies which I was finding difficult to make profit because of the high brokerage, started to make sense now. Hence I took risk and opened the account with Zerodha and deposited small capital to try out them.
3) Excellent Trading Platforms
I have tried trading platforms of multiple brokers and I find Zerodha Kite is the best trading platform available out there.
While other platforms are very complicated and resource heavy, for me, Kite offers whatever required with very minimalistic interface and simple to use with not so bright colors straining the eyes.
4) Customer Support Mechanism
What I like most in Zerodha is, the founder Mr Nithin Kamath himself is very active on resolving the customer queries. He answers most of the queries through Z-Connect which is the platform to connect Zerodha with its customer.
Apart from that, all the queries you raise to them are assigned with ticket and you can track all the solutions and updates provided by the customer support team through the ticket number.
5) Investor Education Initiatives
Zerodha have various investor education initiative such as TradingQna – a forum for traders and investors to ask thier queries and get help answers from fellow traders.
ZerodhaVarsity – Free to all collection of modules with collection of lessons from their research head Mr Karthik Rangappa.
While few established brokers charge for these kind of education, it is totally free for everyone, one need not have account with Zerodha.
Disadvantages of Zerodha Demat Account
1) No Facility to Invest in IPOs
I usually invest in promisig IPOs and since Zerodha is not a bank, it is not possible to invest directly in IPOs through Zerodha.
However I invest through ASBA route and give Zerodha demat account for credit of shares.
2) Not a 3-in-1 Demat account
What I miss the most in Zerodha compared to ICICI Direct is the seamless transfer of funds between my trading and savings bank account.
While Payin (transfer from bank to Zerodha account) is instant through net banking, the payout (trading to bank account) takes few hours. Payout was instant in ICICIDirect.
But I am used to it now by planning in advance and it is the small discomfort when compared to savings I am getting in brokerage charges.
My Final Thoughts on Zerodha
As I mentioned earlier, I have been with them since 2012 and they never disappointed me.
And they have grown from 10k customer since them to 5+Lakh customers now and established them as one of the Best Discount Broker in India.
The management is transparent enough and publicly apologized whenever there was a issue from their end gaining clients trust which is very rare from big corporate houses.
From startup like company to big establishment, their growth was astonishing and it was possible with good technology, pricing and customer support making them ideal for traders and investors like you and me.