Unlike the services received in a normal demat account, you can cut your costs every year with a zero brokerage demat account. A zero brokerage or zero balance demat account does not compromise on any of the services you get with a regular demat account. Here’s everything you need to know about having a Demat account that has zero brokerage trading. A demat account with zero brokerage trading can be divided into three parts.
1. Zero (no) Brokerage for all Segments
All segments of the market — be it equity, debt, futures and options, commodities, and more — can be traded without any brokerage charges with a zero balance demat account using a zero brokerage demat account. This is a unique facility offered by this kind of demat account, and currently, the only other broker in India that offers zero brokerage on all segments is Finvasia.
2. Zero (no) Brokerage for Delivery Trading
After seeing the huge success that the mobile trading app Robinhood had in the USA, Indian discount brokers have started trading accounts whose delivery segments are completely brokerage free as well. Angel Broking is one of these discount brokers. This means that you can sell and purchase individual stocks on the cash segment at ₹0 for every trade.
According to market analyses, not many investors put their money into delivery trades. Hence, keeping it free is a good marketing strategy to bring in more investors. The idea behind keeping delivery trading brokerage free is to let newcomers try their hand with free equity delivery trading. As these newcomers gradually become more experienced with time, they will be more likely to carry forward with derivatives and intraday trading, both of which are not free.
3. Monthly/Yearly Plan
This is the third and final segment of brokerage free trading when it comes to getting a zero-brokerage account. Monthly or yearly plans are often heavily discounted with special deals running throughout the year. This type of demat account is suited to those who are highly active in the stock market and trade in high volumes. In other words, intraday traders may benefit from such deals the most.
How To Find a Zero Balance Demat Account in India?
Securing a zero demat account may sound tricker than it actually is. The reality is that with efficient research online and comparing the prices across brokers, you will quickly be able to find one of the best zero brokerage demat accounts in India. This process is made much easier for you in the following steps. Here are some tips for finding the best zero demat account in India.
Create a list of brokerage firms in India that are currently offering zero brokerage plans
Unlimited trading plans or zero balance demat accounts are available in India, but keep in mind that at a single time there are only a few stockbrokers who offer these services. Also ensure that you are observant that the zero balance plan you have secured today, maybe chargeable one year later. Carefully look for zero brokerage demat accounts by visiting the official websites of brokerage firms in India.
Compare and select the plan of your choice with a broker you trust
The important part which many forget to carry out is comparing the various plans one has found. Pick out a list of brokers and compare them across a slew of offerings. Keep a lookout for any hidden costs. Some brokers may have transaction fees that are not directly disclosed but mentioned in the fine print. A true zero brokerage demat account should try to eliminate all such costs. Hence, it’s crucial to carefully read through the policy documents for all the selected brokers and pick which one suits your needs the most.
Read the pricing details regarding taxation and more
The most important step is perhaps to read the pricing related details regarding the plan you elect. Pricing details will be found separately from the main webpage and will cover all essential information about if or when your zero balance demat account will charge you. Even for those with zero brokerage demat accounts, in some cases, GST is charged by the central depositories and stock exchanges may have their own transaction costs separate from the broker. In zero balance plans, these added costs are usually not mentioned.
When looking for a zero balance demat account in India, carefully read the pricing details of your plan, compare across brokers, and choose a plan that is best suited to your long term investment horizon. Such plans can aid in saving a lot of money, especially if you are an intraday trader or a trader who trades in high volumes often. Ensure you are mindful of GST, stock exchange transaction costs, and other hidden costs that come with a Demat account, albeit they are paid to entities outside your broker.