In India, zero brokerage for delivery trades came along with Zerodha which is why it is known as the first ever Discount stockbroker in the financial market of India. It is also commonly referred as the cheapest or the flat brokerage house that made zero brokerage or commission famous in India and adding several new Demat accounts to the exchanges. Zerodha is a company which was formed in the city of Bangalore and now in the last seven years of their operation, they have spread across the country and made lacs of clients. The investors and the traders call this company with various names such as Budget broker or pay per order brokerage firm and of course discount broker. This company serves all the need of investor whether they are investing in the equity segment or in the commodities or in Currency Derivatives. Zerodha doesn’t have any minimum brokerage and that is what made it famous across the investors. But what made it the most sought-after brokerage house is their policy that you (investor) either have to pay only INR 20 or 0.01% on each trade of any volume and price. The volume of the trade doesn’t influence the Zerodha brokerage charges and thus if you are buying a lot of share or a single share you pay 20 as the maximum charges. They charge as the lower of 0.01% of the transaction or INR 20 for any trade and of course, if you are taking delivery, you don’t have to pay any charges.
In just 3 years of their incorporation in 2010, they become one of the topmost brokerage houses contributing to over 2% of the NSE’s total transaction each day and now the company has a base of almost over 4 lacs of the clients which include both retail investors, traders and the HNIs. This is not the end as you can also buy the mutual funds and that too also with the direct buy/sell provision. There is a product called Zerodha Coins which you can use to buy and sell the mutual funds directly.
The trading platform of Zerodha is facilitated by Omnesys “NEST Trader” and the investors doesn’t have to pay a penny for having the trading terminal, mobile trading facilities and the websites for trading.
The brokerage structure is also very simple and anyone who is interested in the trading can understand it easily. There are various investors who joined Zerodha brokerage and earlier used to trade with other brokerage houses reported more than 80% savings in their brokerage costs which are huge. Most importantly, this brokerage house is completely technology driven making thousands and lacs of trades feasible and easy to operate whether you are an intraday trader or long-term investor, you are going to have a great time while trading on Zerodha platform. They use software like PI which is used for desktop trading and KITE for mobile and web-based trading platforms or applications (apps). The motto of this brokerage firm is to ease the trading and investments in India with no restrictions.
Demat Account Opening Procedure with Zerodha
For trading shares, as you know you need to open a Demat account and for Zerodha account open process you need to submit the following documents and then the following procedure you need to go through –
Documents: The documents that you need to submit to the Zerodha Branch where you are opening your account are –
Permanent Account Number or your PAN Card details in the form of Photocopy (Xerox).
Address Proof which can be your Voter ID, Driving License, Passport Details or Electricity bill of your permanent address etc.
Photos of passport size – 2 copies
Bank Cheques – 2 copies. One cheque should be canceled and submitted for the bank account verification and the other one of INR 300 which is the Equity and Demat account opening fees of Zerodha. If you want to open an account for trading in commodities then INR 200 has to be paid. If you want the form via courier, then you need to pay another INR 100 for its charges.
IT returns.
Pay Slip.
Bank statements of at least last 6 months.
Form 16.
Procedure: You can easily open Zerodha Demat account with the AADHAAR card by linking it online with the Demat account. Otherwise, you can form the fill online and upload your documents and then your account will be opened. If you want to do it physically then, you need to get the form for account opening and fill it up and submit to the Zerodha office along with the required documents mentioned above and have to pay the fees required to open the account.
Fees Of Demat Account at Zerodha
If you are opening an equity trading Demat account then the charges are INR 300. If the account is for trading Commodities then the charges will INR 200.
Zerodha Trading Platforms
There are different platforms and software which Zerodha uses to facilitate the life of its customers and you can trade via Zerodha even with your mobile phone. The technologies and the platforms available for you to trade are as follow:
Zerodha Trader- This is the free application which is powered by the “NEST Trader” of Omnesys which you can easily download and install on your desktop and start trading. This platform is highly functional with real-time monitoring along with fast order execution. This is the most advanced and functional trading terminal in India as of now.
Kite- This is the most users or the trader friendly platform where one can have different language setting which makes trading easy for many traders across the country. There are 10 languages which you can set for your software. Here you can see the charts of technical analysis and thus trading becomes more fruitful as well. This can be used in different devices as well whether it is mobiles, desktop browsers or tablets.
Zerodha Pi- This is a most suitable platform for the traders who continuously follow the trading charts; Algos, different trading strategies as well as back-testing facilities are there on this platform. There are numerous charts and strategies inbuilt to assist you in your trading.
Zerodha Mobile- This is an application software which is made for Android and Blackberry platform and you can trade and see charts using this app.
Trade on Call facility- You can call our terminal dealers and just by paying INR 20 for each trade; you can get your trade done.
Automated Trading Facility
Zerodha is the first Broker in India which has launched the “AmiBroker” feature in its own platforms where one can do fully or semi-automated trading on the line of his or her trading strategies. For this feature, you need to buy the license separately and then you can trade using all the features of this plug-in and make profits.
All Zerodha charges
The Demat account opening charges are mentioned above and along with that, there will be a charge of INR 300 every year for which you maintain your Demat account which you have to pay upfront. This is the maintenance charges of the account you have with Zerodha and it is payable annually.
Brokerages: The brokerages are divided according to trades and they are as follows –
For taking equity delivery – INR 0. You can invest any amount for any time period without any brokerage.
Intraday Brokerage for trading Equities – INR 20 or 0.01% of the each traded amount whichever is lower.
Brokerage on Equity Future trading – lower of the 0.01% or INR 20 for each trade.
Brokerage on Equity options – 0.01% or INR 20, lower of the two on per trade basis (turnover basis)
Brokerage on Currency Futures – 0.01% or INR 20, lower of the two on per trade amount
Brokerage on currency Options – 0.01% or INR 20 per trade whichever amount is the amount.
Brokerage on trading commodities – 0.01% or INR 20, the lower of the two amounts on each trade basis.
STT – For Equity delivery, it is 0.1% on both buying and selling of the equities and for intraday trade, it is 0.025% on the selling side. For futures, it is 0.01% on the sell side and for options, 0.05% on the premium of the sell side.
Transaction/turnover Charges – For equity delivery on NSE it is INR 325 for each 1 crore and on BSE it is INR 1 for each trade on both side. For Intraday, the charges are same on both the exchanges. For Futures, it is INR 210 per crore on NSE and INR 1 for each trade (both side) and for options, it is INR 5300 per crore and INR 1 on both side per trade on the premium of options.
GST – For both Intraday and Deliver on Equity and F&O it is 18% on the sum of brokerage amount and transaction charges.
SEBI Charges – INR 15 per 1 crore for both intraday and delivery. It is same equity as well as F&O.
Stamp Charges – It is according to the rules of the state for both equities and F&O on both delivery and intraday.
Hidden Charges: The other charges can be levied on the following –
Trade on Call facility @ INR 20 per trade.
INR 20 for every position which is not squared off on the orders executed for MIS/BO/CO.
INR 20 as additional charges for courier of Physical copies of contract notes.
If you activate SMS option for trader alerts – INR 1 for equity and Futures and options and currency as well and INR 0.50 for commodities.
INR 9 for fund transfer for Instant payment gateways for twenty-two banks.
DP charges for equity delivery selling – INR 8 per transaction.
Other charges as per NSE, statutory bodies etc.
Zerodha Benefits
You don’t have to pay any brokerage on cash and carry of the shares bought. It will automatically get credited to the Zerodha Demat account when purchased and then when you will sell them out, shares will again automatically get debited from the Demat account.
Zerodha is the cheapest brokerage in India as of now and their brokerage model as discussed above is also very simple.
There are certainly not any hidden fees and all you have to pay are the legal and statutory charges.
The idea of “No minimum brokerage” has been bought by this company only for the first time in India.
Referral Program is another benefit of Zerodha which is for all the customers.
There are various branches of the company across the country which facilitates trading across different and remote regions as well.
There is a feature called “trailing stop loss” which was only available for institutional traders earlier, with Zerodha, retail traders can also avail this feature to limit their losses. This option is used in “Bracket Orders” feature.
Cons of Zerodha
Every good thing in this world has some negative features as well and Zerodha is not an exception. Here are some drawbacks of the company and its services –
You cannot open a 3-in-1 trading account with Zerodha as it has no banking division. But the good news is you can link any online bank account with its trading and Demat account.
You cannot invest in IPO, OFS, and FPO as of now as Zerodha doesn’t have this feature.
Call and Trade are chargeable.
Only if you are trading in commodities, you can get features like Good till canceled (GTC) etc.
There are no margin funding options for the customers. It also doesn’t provide margin against shares for the equity investments.
Final Verdict
Zerodha being one of the path-breaking brokerage companies in India has established itself profoundly with its dedicated services and various options for the retails traders as well as institutional traders. The company not only eases the way of trading in India but also opened new avenues for the traders and made trading pocket-friendly.