DISCOUNT BROKERS IN INDIA
With the increase in Internet penetration in India, more and more trading is being done online. This has led to a new breed of brokers, which are also know as Discount brokers. Compared to full service brokers, you can think discount broker as someone who provides very competitive brokerage rates with a good customer services. Some of the additional services like stock recommendations and portfolio management services are not provided by Discount brokers which are provided by full service broker. Discount brokers are good for ‘do-it-yourself’ kind of investors. Lately they are becoming very popular in India as more and more people have access to broadband and many people try to invest using there own knowledge.
While the services offered by them varies from broker to broker, many of the discount stock brokers do not provide services like stock research, investment in IPO’s, Mutual Funds, FD’s, Bonds and NCD’s. They generally do not have their own research teams and thus do not provide wealth management related services but they do provide a very competitive broking structure.
Discount Brokerage is a new concept in India and its picking up very quickly. There are two sub categories of discount brokers in India by the way they charge the brokerage:
- Brokers charging Fixed Price per Trade :
These are the brokers who charges ‘fixed price brokerage per trade’ irrespective to the size of trade.first The charges are also very low and vary from Rs 9 per trade to Rs 20 per trade.
- Brokers charging Fixed Monthly Fees for unlimited Trades:
These are some discount brokers who charge ‘fixed monthly fees’ and offers unlimited trading in selected segments and exchanges. The main discount brokers providing these services are RKSV and SAS online. They have a very competitive unlimited trading plan from Rs 999 to Rs 3999 depending on the exchange and services you need. You can read our detailed review about RKSV review and SAS online review.
There broking charges compared to full service brokers like ICICI direct or ShareKhan are less by more than 90%. So you can end up saving a lot of brokerage if you trade with these discount brokers.
In case you want better understanding of what is a Discount Broker, view this video
The are many discount operator in India now but the major once are
and many smaller once. They brokerage is very similar but before deciding you should talk to them on phone to make sure that you like the service they are providing.
One thing you should remember about these brokers are they operate completely online and they would never send you anything by mail and it is because of this that they are able to provide these competitive rates. So be sure that you are OK to have a broking account with a broker who don’t have a physical presence. Lately, Some of them have even started opening franchise offices in different cities in India.
Find our top 5 discount brokers list here.