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Flat Fee Stock Trading Broker in India (cheapest share brokers)

Posted on 7/12/2014 9:25:56 AM by Chittorgarh.com Team

Traditionally share trading brokerage (charges or fees) is charged on percentage of value of the trade (i.e. ICICI Direct charges 0.55% in cash delivery segment). These brokers are also known as 'full-service brokers' or 'traditional brokers'.

There are few challenges with these brokers as they are expensive, the brokerage with them goes high with the size of trade, client has to do lot of calculations to find out the cost of the share and a minimum brokerage charged (i.e. ICICIDirect charges minimum Rs 25 per trader) makes the trading in penny stocks almost impossible.

With the technology used in trading has changed significantly in recent years and online trading become a norm, a new category of brokers known as 'Flat Fee Stock Brokers' or 'Discount Brokers' has flourished and took away a major chunk of trading volume from the traditional brokers in last few years.

Flat fee stock trading is a much simplified and cheaper option available to traders today. The flat fee share dealing is already become very popular in developed countries (company's like E-Trade, Sharebuilder, Fidelity, Charles Schwab, and TD Ameritrade) and finally making its way in to India's Stock and Commodity Trading market.

Flat Fee Stock Trading brokers (also known as discount brokers) charges a fixed amount (i.e. Rs 20 or Rs 25) per trade irrespective to the size of the trade. The trader pays fixed price brokerage, say Rs 20, for trade of Rs 100 or Rs 1,00,000.

For example:

When you buy 500 share of XYZ Ltd at Rs 0.15 per share, the brokerage charged by Fixed Price Broker will be Rs 20; while the traditional broker will charge minimum of Rs 25.

When you buy 500 share of ABC Ltd at Rs 750 per share, the brokerage charged by Fixed Price Broker will still be Rs 20; while the traditional broker will charge Rs 1875 (at the rate of 0.50%).

The above example clearly show that the brokerage charged in flat fee share dealing is significantly low and simple.

Why I should move to Flat Fee Stock Trading Broker?

There are multiple advantages of moving to a Flat Fee Stock Trading Broker. Some of them are discussed as below:

  • If you are an active trader and don't need or want advice, research, recommendations or any other services, this is probably the broker type you should choose.
  • They can save above 90% brokerage on most of your trades. No additional fees, just one low, all-inclusive rate. They are more affordable to average investors. With the saving of this size, you can trade more.
  • It makes the calculation of brokerage really simple. Once you know the number of trades you did, you can simply multiply it with the fixed brokerage and find out the total brokerage bill you have to pay (excluding taxes).
  • They are focused only on brokerage services and provide better customer services.
  • There are no hidden charges. They do not charge for software uses.
  • Taxes charged on brokerage (i.e. Service Tax of 12% on brokerage) are less as brokerage itself is less.
  • The trading platforms provided are industry standard.

What Flat Fee Share Trading Brokers do not provide?

They are mostly no-frill brokers and do not provide many services which traditional share brokers provide including personal advices, research reports, recommendations, 3-in-1 accounts (bank + demat + trading account), branches in every city etc.

Online account statements, trade conformations, bills, payments etc are available for free. But additional services like call and trade, paper statements etc are charged extra. This is quite similar to the traditional brokers who also have additional charges for add-on services.

The flat-fee brokers also may not provide all the investment options a full-service broker may provide. For example Zerodha doesn't provide option to invest in IPO's.

In person visits to branch offices is not possible with almost all discount brokers. As said earlier, to reduce the cost, they keep limited number of branches in metro cities only.

Customer service of the flat fee brokers may not be as good as other big traditional brokers. The customer services representative may are not available 24*7 to answer your questons. Very few discount brokers provide customer services on late evening or on Saturdays and Sundays.

In our discussion with the management of these brokers, most of these brokers are now planning for 24*7 customer service.

Which stock or Commodity exchange can I trade?

The flat fee stock trading brokers are same as traditional brokers. They are registered with SEBI and multiple stock exchanges. They provide trading facility in almost all popular stock and commodity exchanges in India including BSE, NSE, MCX etc.

They also provide services across all the segments of equity and commodity trading including Intraday Cash, Delivery Cash, Futures and Options Trading.

Trading with discount brokers is as safe as trading with any other rational broker as they are registered with or govern by the same bodies (SEBI and Stock Exchanges).

How Flat Fee Stock Trading Broker's make money with such a low brokerage?

They are discount brokers who run on volume based business model. Their main objective is to increase the volume of trades and thus make more money.

When the trade is cheaper, the trader executes more trades and thus the broker makes more money.

Also their operational cost is very low as they provide no-frill broker services. They leverage technology to keep the cost low. They do not spend money on managing branches in every city and team of researchers who provides daily recommendations. Their spending on advertizing is also less as they work on referral model to promote their services.

By keep the cost low and trade volume high, they can make more money than traditional brokers. The simplicity in the business model makes them very attractive to the traders.

What parameters should I look at before choosing a Flat Fee Stock Broker?

Each investor is unique and has different requirements. Following are few key parameters which can help a trader in choosing a broker:

  1. Brokerage Fees and other charges

    You should carefully look at the fixed price brokerage as well as additional services charges of each of the brokers. Do not make your decision only on the fixed brokerage amount.

    For example: Zerodha charges Rs 20 per trade and Composite Investment charges Rs 25 per trade. But Composite Investment 'Transaction/Turnover charges' are Rs 450/crore on Equity Futures and Rs 375/crore on Currency Futures while for Zerodha Transaction charges are Rs 490/crore on Equity Futures and Rs 440/crore on Currency Futures.

    Brokers may require a minimum balance. It is worth checking about this in advance.

  2. Available Investment Options with the Broker

    Unlike tradition full-service brokers, the discount brokers do not provide wide range of investment options (i.e. stock, commodity, currency, IPOs, FD's, Mutual Funds etc.). You should carefully look at the investment options available.

    For Example: Zeordha doesn't provide share trading at BSE, option to invest in IPOs and Mobile trading platform.

  3. 24*7 Customer Service

    It is important to know the timings of customer service representatives availability on phone or online though chat.

  4. Ask for a demo of trading platforms and back office software

    Before you open the account, make sure to ask for a demo of the trading platform you will be using. It is important to check if your computer is compatible and your internet connection is good enough. The interface, usability and security of the online trading account and trading software's should be check before opening the account.

Who are top Flat Fee Stock Trading Broker in India?

  1. Zerodha, The Free Trade Zone

    Zerodha Logo

    A Bangalore based Flat Fee Share Trading Broker who charges Rs 20 per trader. Zerodha was the first company to introduce this brokerage model in India in June 2010. Click here to know more about Zeordha.

  2. RKSV Securities The Dream Plan (Flat Rs 20 Per Trade)

    RKSV Sec Logo

    RKSV is a Mumbai based popular discount broker. RKSV offers both unlimited trading plans and flat Rs 20 per trade brokerage plan across segments at NSE, BSE and MCX. RKSV's Dream Plan offers trading at flat Rs 20 flat irrespective to the size of the trade or number of lots in a trade, with the first 5 trades free, each month, for life. Click here to know more about RKSV Securities.

  3. Composite Investments (Compositedge), It makes sense

    Compositedge Logo

    Composite Investment is a Bangalore based broker since 1995. Composite Investment started the Flat Fee Share Trading service in April 2012 though its portal Compositedge.com. Compositedge charges Rs 25 per trader. Click here to know more about Compositedge.

Conclusion

Choosing the right broker mainly depend on your investing patterns and need for services and advice. The trader should consider multiple options before choosing the broker. While Flat Fee Share Brokers are cheaper options, they may not provide research, recommendations and the level of personal services which you may be getting from your traditional broker.

Open an account with Zerodha


User Comments

   
34.  mohan      Nov 9, 2014 6:25:21 PM IST
I TRIED ALL like rk bezel geojit out of all SAS ONLINE IS THE BEST. UNDOUBTEDLY I CAN SAY THAT .Recently they have started commodities trading also with unlimited plan of just 999 only or flat 9 per trade Earlier i used to spend lot amouny on brokerage now iam one of the happiest person 
33.  Kyan      Oct 12, 2014 7:37:28 PM IST
@uniothoi
i''m not going to stretch my view on you but from my suggestion don''t go for ICICI Direct or HDFC Securities. Becaboth provide 3-in-1 account but that''s the attractive trap they to attract investors. Do you think there is a sense of having dp and banking in same place than seperate. no and not at all. there is nothing wrong to keep your dp and bank account in seperate banks or brokers or dp wherever you felt comfort. Also don''t think these ICICI or HDFc will serve to make profit at all.cos you are one of the 22lakhs customers they have. so just go for others than this ICICI or HDFC or Sharekhan. if you still have any confusion to chose among the brokers then message here. People will help you to choose.But just think ..if you feel safe and comfort in 3-in-1 account is not true. think once on this brokerage in ICICI is 0.55%, HDFC 0.5%. Sharekhan 0.5-0.45%. But in other brokers is just fixed rupees. see it always better to choose broking plan with fixed plan becaif you lose in a share you just loose a fixed sum amount Rs.15 or Rs.20. orelse Rs.25 but in ICICI or HDFC like brokers you will loose each time when you change your stocks. Hearty wishes For your Investments.. 
32.  shiva prasad      Sep 12, 2014 11:50:25 AM IST
Please advice me which is best cheapest share broker with good costumer service which is best either sos or rksv th1nk u 
31.  Shanthi      Sep 5, 2014 6:55:30 PM IST
Would like to understand how safe RKSV securities is? 
30.  waleed      Aug 23, 2014 12:10:08 PM IST
is this RS 20 per trade for both buy and sell?or separate for each transaction? 
29.  suresh      Aug 21, 2014 11:37:40 AM IST
ambalal shares is bull crap.Its very expensive & cust service is worst.Never go for it.cheating in broking trash company...Never go for it
 
28.  Rohit      Aug 8, 2014 11:09:36 AM IST
When it comes to Services. I have heard Just Trade Securities is doing well. In fact their Research is pretty good. 
27.  Prasannan      Aug 1, 2014 11:02:13 PM IST
simply lowest brokerage is not only the concern but their service also  
26.  Rajesh      Jul 21, 2014 11:10:55 AM IST
Hi I just need to open an account. Plz tell me which brokers will be the best.... 
25.  Raja      Jul 10, 2014 9:48:10 PM IST
ICICI direct is bull crap.Its very expensive and cust service is worst.Tools are great but very costly.Never go for it. 
24.  Mahesh      Jul 7, 2014 6:12:34 AM IST
Any one knows about BENZEL It provide just 7+7=14rs per order. It is good 
23.  unithoi      Jun 10, 2014 1:18:59 AM IST
wht abt icici direct? plz some one convince me abt broker rate? thanks 
22.  vishal kumar      Jun 2, 2014 7:46:57 PM IST
zerodha is good but sasonline is not given good exposure 
21.  YASH A      May 16, 2014 7:01:06 PM IST
tradesmartonline TRADE SMART ONLINE is another broker offering this but after using for many months i can review that their customer service is VERY BAD. THEY WILL BLOCK YOU MONEY AND THEN CUT YOUR CALLS AND NOT REPLY TO EMAILS AND YOUR MONEY WILL BE STUCK! 
20.  Amit Choudhary      Mar 6, 2014 6:21:53 AM IST
How much custmor Sas online have currently.? And from how many year it is in operation.? 
19.  AJIT ROY      Jan 24, 2014 4:10:28 PM IST
sasonline.in is good n lowest in brokerage
per trade 9 rs n monthly unlimited @999 
18.  Mohit      Jan 23, 2014 8:06:21 PM IST
Yeah guys, you should post about SAS ONLINE?

@DILIP
@RASHMI

Did anyone of you spoke with any representative of SAS Online? I have spoken to Anubha (one of their representative). I am planning to visit their office as it''s only in Delhi itself. If any of you guys wanna talk to them personally let me know and we could all go together, their office is in Mayur Vihar somewhere I think. 
17.  rashmi      Dec 17, 2013 3:07:30 PM IST
What about SAS online................?????
guys....pls giv ur replies abt SAS online.......pls du share ur views abt....... 
16.  Mathew      Dec 1, 2013 10:48:41 PM IST
Dont take geojit Its hopeless slowly eat your capital. The mgt keeps the media happy and loots customer money 
15.  rama krishna      Nov 8, 2013 7:20:40 PM IST
I would like know about birlamoney,geogit,religare and its brokerage charges and who is cheapest brokerage provider 
14.  Sandeep      Oct 28, 2013 11:17:03 PM IST
I agree with Chintan. DO NOT GO WITH ICICIDIRECT. you will never earn a single rupee becaof their high brokerage. Also there is always a technical problem at peak hours becaof this I had lost a lot of money. If you are frequent trader, Go with RKSV with freedom plan otherwise go with zerodha. DO NOT GO WITH ICICIDIRECT. This is my advice and experience.  
13.  Roneet      Aug 21, 2013 4:06:35 PM IST
You Missed RK-GLOBAL, Cheapest of all mentioned above 
12.  DILIP JAIN      Jul 26, 2013 12:12:23 PM IST
What about SAS online''s 999/ unlimited scheme  
11.  CHINTAN      Jul 9, 2013 8:07:34 PM IST
first of all don,t at all trade with ICICIDIRECT.COM becarecently i have made a penny stock trade on icicidirect.com for total value of rs. 3600 and for that amt they have charges me a brokerage of rs. 800 which is almost 22% of the total value. due to this i will close my a/c very soo.
i usually trade in penny stock can u tell me which kind of broker as well as brokerage plan will be confortable for me. or which of the above broker is reliable. i stay at pune. 
10.  amit gupta      Jun 20, 2013 12:01:27 AM IST
very high brokerage to kotak securities &no margin provided our customer .kotak sec.ki call mai kaam karna very risky. 
9.  GUPTA JI      Jun 14, 2013 11:00:16 PM IST
YES SECURITIES COMING IN FEW MONTHS TO BLEW YOU ALL OFF 
8.  john      Apr 21, 2013 3:59:26 PM IST
WHAT Flat Fee Stock Trading Broker provive all the segment and 24x7 customer care support,recommendation? 
7.  Dhananjay      Mar 5, 2013 9:46:08 AM IST
Great info ......I was desperately looking for this. 
6.  SHAFIUDDIN      Feb 15, 2013 8:49:05 PM IST
Which Flat fee brokers provide margin facility?
Which is the cheapest plan for intraday?
Which flat fee broker has better trading platform? 
5.  RS      Jan 20, 2013 11:48:44 PM IST
RKSV & COMPOSITE INVESTMENT CHARGE Rs.50 per trade Karnataka state duty
So per round trade cost for RKSV Rs.25+25+50 &
for COMPOSITE INVESTMENT Rs.25to16+25to16+50

Stamp Duty is charged at 0.01% or Rs. 50 per contract note - whichever is lower.
*Stamp duty is charged according to the Karnataka Stamp Duty Act and is not included in the brokerage calculator.
 
4.  T Gopinathan      Oct 27, 2012 1:47:07 PM IST
Dear sir
I icici direct for trading .i will take to fulltime trading from December onwards, at icici direct there is margin plus facility where you can carryforward your margin positions (if you do not want to close)and they charge rs 65 perlakh per day interest on the margin amount .This is very good facility as many day traders loose beca they have to close the trade the same day .I want to know any flat fee brokers provide margin facility.Thanks
 
3.  chitra      Aug 25, 2012 6:13:43 AM IST
great info

thanks 
2.  COMPOSITEDGE      Aug 1, 2012 9:23:32 AM IST
Dear Sir,
Plz find below our address & contact details: Composite Investments Pvt Ltd No. 30/1, 3rd Floor S J Towers, Mission Road Bangalore 560027 Karnataka, India. 080-41145828/ 829 / M: 9844700001 Thanks & Regards, Nethra.P  
1.  balamurugan      Jul 20, 2012 1:26:10 PM IST
I read all you brokerage slab and need account so what is you telephone number. 


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