We have been listening to discount broker for the last few years, so first of all we should know what stock broker means.
A person who carries out buying and selling orders at a reduced commission rate can be called as a Discount broker. Unlike a full-service broker, a discount broker doesn’t provide investment advice or perform analysis on a client’s behalf.
However, the internet has brought an explosion of best discount brokers that allows customers to trade at smaller capital with a smaller fee. In most of the cases, we see that most discount brokers operate through online platforms.
If we talk in-depth about discount brokerage before it came to India by Zerodha in the year 2010 it was well established in eastern countries. Comparing full-service brokers with discount broker, we see that discount broker charges are slightly lower as compared to a full service broker. On the other hand, a discount broker doesn’t provide investment advice, one to one advice, etc.
To carry out the trading they ensure to bear the minimum infrastructure being required by the customers.
It has been seen that in the securities industry, best discount brokers carry out the order at a cheaper price and execute an order for their clients.
Advice, personal consultations, research, tax planning, and estate planning services are not being offered to the customers. As extra wealth management services are not being provided to the customers but they can be offered with lower fees as they don’t spend much on closing deals with high-net-worth individuals. Apart from that, it is being seen that most of them are operating their business online, resulting in low overhead.
Discount brokerage provides their client with their accounts to enter an order for execution. This investor doesn’t interact with live brokers. And if there is any communication, they are only done for trade execution or any query related to trading. The services being provided are mainly aimed at traders and investors as well as electronic trading platforms which are beneficial for active traders with services like charting and position monitoring.
Choosing a discount broker highly depends upon its capacity to offer much lesser prices and services to a client. As lesser a commission charged by a discount broker as greater profits and improved decisions will be enjoyed by customers. With a discount broker, a trader enjoys maximum profit in comparison to a traditional broker. Therefore, with a discount broker you will save a handsome amount on your profit otherwise wasted overpaying huge commissions to a traditional broker.
It is totally a choice of an investor whether he/she wants to go for a full-service broker or discount broker. It’s totally depending on the knowledge they are having on investment, market experience, financial goals and current financial scenario of the market.
On the other hand, a full service broker can stand out better for investors who need professional investment advice or support and are required to stay on top of their financial planning outside of investing. It has been seen that discount brokers are useful for investors and traders as they actively buy and sell securities frequently.
It has been also seen that investors who trade frequently, are being benefited from lower commission discount broker charges. On the other hand, investors who don’t need advice have a smaller portfolio or their trades executed are usually better using discount brokers.
Another considerable point to be remembered while working with a discount brokerage firm is the safety offered by it. Mostly, discount brokerage firms have large operations and they work on large volume and thus their brokerage and commissions remain safe despite the trade volume. However, traditional brokers changes commissions depending upon the trade volume putting one’s investment into the stake. Therefore, with discount brokerage firms one’s investment remains in a safer hand.
Discount Broker allows an investor to interact straight away with a stock exchange. With a discount broker, an investor trade into a stock on its own while learning all the aspects of a particular stock. For the purpose of trading, a discount broker offer trading platform to a client to carry out their own trades. However, a discount broker doesn’t offer any advice or guidance on any trade. They facilitate customers with efficient services and educational tools to facilitate customers to buy and sell investment, easily.
Apart from trading, a discount broker is also found in other industries like real estate and other financial services. In industries like real estate, discount brokers help individuals in buying and selling properties. Discount brokers also have access to home listings similar to real estate agents.
On the other hand, discount brokers can also sell insurance products – but again they don’t provide professional financial advice.
In simple, if the investor knows what he/she has to do, they can probably find the best discount brokers, which will help them to instruct for less money rather than a piece of advice- oriented broker would charge.
How swiftly you respond to a customer query and smoothly resolve it depends upon efficiency of a discount brokerage firm. Based upon online working, customer care services are an important part of entire working of a discount brokerage firm. Being most of the time online away from the physical location you should be sure about the type of customer services offered by the discount brokerage firm you are selecting. At the same time look out for the night desk provision and tech support at the discount brokerage firm you are thinking to opt at.
However, it will be a wise decision on your part to choose a discount brokerage firm just not only limited to stock only but also dealing into other financial products as well. A discount broker you are thinking to work with should also be dealing into other financial instruments like selected by you should also be dealing with a government bonds,
options, corporate bonds, mutual funds, etc.
Top level discount brokerage firms employ different levels of educational tool to impart stock related education to its customer and clients. The innovative brokerage firms even go to an extent of organizing user summits as well as branch level educational events. Brokers also offer learning through their websites, mobile apps and through e-learning means. As much you learn and implement the trading lessons as much the brokerage company will earn in form of commissions.
With the help of discount brokers, trading becomes much easier with reduced costs and minimal support. Various discount brokers are operating in India.
Here is the list of best discount brokers in India:
1. Wisdom Capital
Wisdom Capital is one of the best discount brokers in India offering free investments and outstanding products. Wisdom Capital is one of the favorites ever since I have opened an account with them and the most amazing thing in wisdom capital is that they have 3 plans known as Freedom Plan, Pro Plan, and Ultimate Plan.
In all the plans the account opening is free and they provide lifetime validity. In Freedom Plan, the fee for brokerage in NSE Equities is 0.00%, in the Pro plan, it is 0.01% and in an ultimate plan, it is 0.02%.
Talking about Brokerage in NSE Future, the freedom plan is 0.00%, in the Pro plan it is Rs. 9/Trade and in the ultimate plan, it is 0.005%.
Talking about Brokerage in Options, the freedom plan is 0.00%, in the Pro plan it is Rs. 9/trade and in an ultimate plan, it is Rs.15/Lot.
Below are some of the Pros and Cons of Wisdom Capital:
Zerodha is another best discount broker in India after wisdom capital which offers free investment and outstanding products.
Talking about the charges, they charge Rs 20/Executed order, and the good part about the charges is that the amount of Rs 20 is waived off if you don’t sell your shares on the same day, which means that they charge zero brokerage on all investments and Rs. 20/order for trading.
The trading platform which is being offered by Zerodha is known as KITE, which is clean, user-friendly, and easy to use.
Below are some of the Pros and Cons of Zerodha:
5Paisa is being promoted by India Infoline (Infoline is one of the reputed full-service stock brokers of India), which offers a flat fee structure.
The best is that they provide free research and recommendation to their clients. Being the best discount broker, this is a good thing in 5Paisa.
But, one thing in 5Paisa is that their account opening fees are very high i.e. Rs. 650 and the annual maintenance charge is Rs. 400/year.
Below are some of the Pros and Cons of 5Paisa:
Tradejini is one of the famous discount brokers around south India. Tradejini has single office at Bengaluru. They have reasonable brokerage charges with Rs. 20/executed order. The best thing of tradejini is that they offer 30 days free and unlimited trading after you open your account for first 30 days and all the segments are absolutely free.
However, tradejini invest in developing their own- in house trading platforms. They are dependent on NSE NOW and NEST platforms. (NSE and NEST are one of the top-notch platforms, but other discount brokers have moved to their own platform but tradejini has to remain competitive)
Below are some of the Pros and Cons of 5Paisa:
Upstox is also the same as another discount broker located in Mumbai. The time span of starting for upstox and Zerodha was the same. Upstox comes next to zerodha. In initial days they were known as RKSV with having unlimited plans. After which they followed Zerodha trading path and now they charge the investor same as Zerodha. Recently, Upstox got huge funding from Kalari Capital backed by Mr. Ratan Tata. The trading platforms are being build by the in house team and it comes with loaded features. Recently, they have opened their branches in Pune and Delhi.
Below are some of the Pros and Cons of 5Paisa:
As there are many number of discount brokers in the market to choose from, each one is offering different level of services. If you prefer working absolutely online than there are discount brokers with minimum fees in the market. There are also discount brokers in the market that work as a branch office and for a trade you can have a
market discussion on slightly paying a bit more on every trade with them. Agreeing on paying a bit higher fee you can enjoy stripped-down services that let a client to make trade online under the assistance from one of their full-service brokers.
It is the wrong assumption that discount brokers are only for the traders with lower net worth in order to make a quick buck. However, in the prevalent market practice, the money at your disposal any stock broker will be agree to execute a trade in a split second and at a much faster pace than anyone else. Contrary, for a trade having extensive knowledge and experience with a long term perspective and knowledge to manage their own money can easily opt for discount broker instead of a full-service broker.
The biggest advantage offered by a discount brokerage firm is the online trading platform offered by it. As costs with online platforms is quite low due to their online availability. Moreover, it allows you one to analysis and monitoring of real time market data. With a discount brokerage firm you can download a trading platform you wish to use and create a platform. While placing order online a trader doesn’t needto call his broker ob phone instead on the basis of real time data he can do the transaction on his own on lower discounted fees.
Talking about trade in the stock market which is not only dependent on profit and income but also on commission and brokerage. The fee which is being charged by the broker in return of service is known as brokerage and it varies from broker to broker. There is a certain trend of traditional brokers for charging a huge fee for some of their specialized services they offered to their investors which has led to the breakaway of investors from them.
On the other hand if we compare discount brokerage firms with traditional firms which charge low for their overall availability on the internet, which helps in creating a technology enabled trading platform which allows investors to trade without any assistance and advice from the best discount broker.
If we talk about India, discount brokers are an evolving concept and there are various companies which are offering low price trading services to its clients. It has been seen that low brokerage firm run their business model successfully because of few employees, fewer products, and no advisory fees.
Best Discount Broker Which Provides Security
There are different types of discount brokers which provide securities to the investors according to the plan they choose or buy. Now, there are different types of discount broker which provide different level of security to their investors. Best discount brokers like Wisdom Capital, Zerodha, 5Paisa, Tradejini and upstock.
Freedom to Choose from an Extensive list of Products
There is a huge list for best discount brokers in India, but choosing the best one is really a difficult task for an investor. Competition is on high pick as there are many stock brokers available in the market and all discount brokers are providing great deals with their product. Seeing all this, it becomes really a difficult task for an investor to choose the best discount broker in India. Investors should also look about the discount broker which they are choosing and should also deal in other financial services like they should deal with government bonds, corporate bond, mutual funds etc.
Opportunity to interact Directly with Traders
Discount brokers allow an investor to interact directly with stock exchange. With the help of discount broker, investor can trade as well as learn other aspects of particular stock. For trading purpose, a discount broker offer trading platform to the investors to carry out their own trade. Discount broker doesn’t provide any advice or guidance on any trade. They serve customers with efficient service and educational tools to facilitate investors to buy and sell investment, easily.
Good number of educational tools to Enrich Investor Knowledge
Best Discount Broker in India provides various educational tools to provide proper knowledge to customers regarding stock broking and trading so that they can invest their investment in the right manner and in the right way. The different top discount broker offers to learn through their websites, mobile application, and through e-learning medium. As much as the investor will learn and implement the more commission will be earned by the discount broker.
Different level of service is being offered by Discount Broker
As there are wide varieties of discount broker available in the market, all of them have different services which is slightly different from each other. Some of the investors prefer to work absolutely online and there is a different discount broker with minimum fees in the market. There is a discount broker which works as a physical office/ branch office and for trade, they have a market discussion that is paying slightly higher while trading with them.
Knowledgeable trader Reaps up the Gap of Discount Brokerage Services
If we say that discount brokers are only for traders with a lower net worth to make in order to make a quick buck then it might be a wrong assumption. But it has been seen that any stock broker will be agreeing to execute a trade in a split second and at a much faster pace than anyone else in the prevalent market practice.
We can easily opt for a discount broker instead of a full-service broker for a trade having a better experience and extensive knowledge with a long term perspective to manage their own money in the market.
Budget and Financial need is a key factor for Trade
One of the good things about the leading discount broker in India is that it allows investors to provide freedom to work according to his budget and need. A right investment plan with an assessment can help in reducing the service costs and commission charged by a discount broker.
It totally depends upon the decision of a trader as the more decisions the trader makes on his own the more cost-effective will be its account. With the help of a discount broker, a trader generally has a better understanding of the trading market, which results in reducing the consulting cost.
After looking towards all the criteria, it can be said that finally before working with a discount brokerage firm the best option is to have an idea about the industry, how it works, and how things get implemented so that the best discount broker and investors both get satisfaction from their end. Before opting for any stock broking there should be proper information regarding commission rates, customer support, education tools, application, and other essential things.