How To Get Low Brokerage Charges On Demat Account In India?

Stock market investments are popular among investors all over the world due to their excellent return generation potential when compared to other investment options.

They acquire traction due to their high risk to reward ratio compared to fixed income instruments.

Stock market instruments come with a risk appetite. Moreover, while buying or selling stocks, the purchase or sale price isn’t the only consideration. For each transaction, you must pay brokerage as well. Brokerage fees are the prime trading expenses associated with every transaction.

Brokerage fees are not standard. It differs from one broker to the other. It also differs on the type of trade, broker, subscription plan, and pricing structure. Hence, you must evaluate potential brokers to lower your trading costs based on the following factors.

Aspects To Consider For Broker Selection

  • Broker Type

There are mainly two types of brokers

  1. Discount Brokers and,
  2. Full-service brokers

The array of services provided by each of the two broker types is what differentiates them. Discount brokers, unlike full-service brokers, do not provide services such as research and advisory, investment consulting, IPO application, branch support, and so on. Thus, their resources and license expenses are significantly reduced.

Full-service brokers have higher operating costs as they provide a wider range of services. They are ideal for novice investors who have little or zero knowledge of financial markets.

Discount brokerage services can suffice if you have sufficient financial understanding or are a seasoned investor. In short, a Low Brokerage Demat Account with a discount broker reduces your overall transaction costs substantially.

  • Pricing Model

The pricing model used by a broker has a significant impact on the trading charges. In India, most brokers use a fixed-fee or volume-based pricing model. Your brokerage charges will stay the same regardless of your trading volume under the flat-fee pricing structure. So, this pricing model is excellent for those with high trading volumes.

The volume-based pricing system, on either side, charges brokerage based on trading frequency or volume. This model may work for you if your trading frequency and volume are low.

  • Trade Type

You may use your Low Brokerage account to execute a variety of trades. Equity delivery trades, intraday trades, futures & options trades, margin trades, and so on are some of the most common stock market trades.

  • Subscription Plan

The sorts of subscription plans offered by a broker may be one of the most important considerations when assessing potential brokerage fees. Some brokers cater subscription plans to certain investors based on their trading experience. You can get the trader app from the App Store for convenient trading.

Thus, after a thorough comparison of the subscription plans offered by various brokers, you may be able to identify the best low brokerage service provider.

  • Demat AMC (Account Maintenance Charges)

Every year, you have to pay AMC for Demat Account to your broker. The AMC differs from one broker to the other. Some brokers waive 100% AMC for the first year of subscription. You should check the same before deciding on a broker.

Highlights:

While these are some of the broad criteria for selecting a Low Brokerage service provider, it is crucial to first understand your investment style and risk-return profile. This will assist you in selecting an appropriate broker and price plan.

As a novice, you can begin with the basic or beginner plan. You can upgrade to higher-order subscription packs once you’ve gained enough trading experience.

In a nutshell, making proper decisions will help you reduce your trade expenses, thereby increasing your profits.

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Christophe Rude
Christophe Rude
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