Zerodha : First Discount Broker in India – A Detailed Review

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Founded in 2010 by Nithin Kamath Zerodha is an iconic brand and pioneer of discount broking in India. Zerodha not only tops the list of discount brokers in India but also appeals to traders for its low brokerage charges. Most importantly the reason Zerodha shines is because of its disruptive pricing models and in-house technology that have now made Zerodha the biggest stockbroker in India by active retail clients, and the biggest by trading volumes on the top Indian stock exchanges.

It is headquartered in Bangalore and has physical presence in all major Indian cities. As of 2019, Zerodha is the largest retail stock broker with over 8 Lakh active clients and contributes upwards of 10% of daily retail volumes across Indian stock exchanges. It has around 8.5 lakh active customers currently and aims to quadruple that number by 2020. It is very important to note that Zerodha has only relied on word of mouth publicity for marketing its brand.

Zerodha is known is for its regular innovations and disruptions in the financial industry with its latest products Coin and Small case aiding in simplifying the investment process for customers.

Why Zerodha?

In this section, we will discuss why zerodha has become so popular in such a short space of time and the answer to that is, Firstly it has the best industry trading tools and platforms and secondly and more importantly it is one of the cheapest brokers in India. Today, Bengaluru-based Zerodha has 1 lakh clients who trade derivatives worth a total of 11,000 crore turnover every day, 12k crores in equity, 1k crores turnover daily in commodities and also offers 8% everyday retail trading volumes on all BSE, MCX, and NSE. Zerodha has done a great job in pushing the boundaries in the brokerage space. Old-school brokers are now having a difficult time keeping up with discount brokers like Zerodha.

Zerodha has been awarded:

  • ET Startup Awards 2016
  • India’s best retail brokerage for 2018” by NSE
  • Zerodha founder Nithin Kamath awarded entrepreneur of the year 2017 (Startup) by EY

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Types of Accounts

Equity Demat Account

A Demat Account is an account that allows investors to hold their shares in an electronic form. Dematerialization is the process of converting physical shares into electronic format. Furthermore if you have shares with any other broker you can easily transfer them to zerodha.

The whole process of opening a demat account with zerodha is very easy as it can be done online in a few clicks.

Presently in India, we follow a T+2 rolling settlement cycle for Delivery based trading. What it means is that if you buy 100 shares of Reliance on Monday (T day as we call it) for delivery, the shares will come to your Demat Account only on T+2 day (Wednesday evening). Similarly, when you sell stocks from your Demat Account, you’d be able to withdraw the money (Sale credit) only on Wednesday (T+2 day), you can however, use the credit on T day itself to make fresh purchase of Equities.

Equity & Derivatives Trading Account

A trading account can be any investment account containing securities, cash or other holdings. Most commonly, trading account refers to a day trader’s primary account. These investors tend to buy and sell assets frequently, often within the same trading session, and their accounts are subject to special regulation as a result.

With Zerodha you can easily open a trading account with a few clicks at a minimal cost of Rs 200. Also remember it is not possible to open a trading account in isolation if you are a day trader as zerodha forces you to open a demat account as well.

All settlements on a Trading Account happen on T+1 day. So what it means is if today (T day) you make a profit of Rs. 10,000, you will be able to withdraw this profit only on T+1 day. You can however utilize the Rs.10,000 profit to take a fresh position on the same day (T Day).

Commodity Account

A Commodity Trading account is what you open with a Trading Member (Commodity Broker as you call him) of recognized Commodity Exchange (MCX, NCDEX etc. in India).

As the name suggests this account is opened by traders who want to trade in commodities or hedge their risk using commodity derivatives namely commodity futures and commodity options.

All settlements are done on a T+1 basis, so if you make profit you will get the money in your account on the next day. Again important to note that a commodity trading account cannot be opened in isolation.

Online Trading Platforms

The Discount Broker currently offers customers access to three platforms: Zerodha Kite 3.0 (Online Trading Software), Zerodha Kite Mobile (Mobile based for Android and iOS users), Zerodha Coin (Web-based platform for mutual funds investments) and Zerodha Coin Mobile (App based). Their customers have access to all of these platforms regardless of account minimums or trade activity.

KITE WEB

Kite is a robust online trading software which offers its customers with a modern, sleek and innovative platform in addition to providing excellent usability making it very easy to trade across all markets. It is also a very good Platform for placing normal buying & selling, SL, SL-M, Bracket order, Cover order, Trailing stop-loss order & after-market order. So basically kite covers all the order types that you need in your trading.

Here are some salient features of KITE:

  • Extensive charting techniques with large number of indicators.
  • Extremely fast application allowing quick order placements
  • Easy to use User Interface which allows users to easily choose and analyze stocks
  • Search across a wide array of stocks and F&Os at zero latency
KITE WEB
KITE Mobile

Kite Mobile is minimalistic, intuitive mobile trading app designed for the tech friendly Indians who like to choose and analyze their investments  on the go. Here are some features of the mobile app:

  • Live streaming data
  • Multiple marketwatch and live market depths
  • Advanced chart with 100+ indicators
  • Years worth of free historical chart data
  • Trade Equities, F&O, Commodities, Currency
  • Various order types: Regular, AMO, BO (Bracket orders), CO (Cover orders)
Zerodha – Kite Mobile

How to use Kite Mobile

Marketwatch: It provide a list of top 40 stocks you want to keep an eye on so that you don’t miss out on possible investment opportunities.

Funds: You can add and withdraw funds from and to your bank account using a payment gateway via the Funds section of the app.

Orders: Place Buy/ Sell orders using this window.

Portfolio: Using this section you can view your holding and check your Live P&L.

Charting: Over 100 indicators, 6 different chart types, 19 drawing tools, and look at as many charts at a time. Set chart templates, intraday data from 2014 and daily charts for over 7 years for stocks, commodities, F&O, and currencies.

Kite Connect API

Zerodha’s Connect API is a set of APIs built over their digital platform KITE which can be used by developers to gain programmatic access to  execute real orders, obtain live market data, manage portfolios and more. There are 2+ million trades per day executed using Kite API.

Kite Connect is a way to leverage the zerodha’s cutting edge technology to its tech savvy clientele who demand a personalized investment experience which is beyond the capabilities of the trading platform.

Kite Connect API
Zerodha Varsity

Zerodha varsity is the education platform that is provided by the zerodha to anybody who wants to learn how stock market works. This this the one of the best educational website available on internet. In zerodha varsity you will learn from basics to advance concept of stock market.

Zerodha Coin

Stock market is not only about trading in stocks of different companies but it is also about investing in various other financial products like Mutual Funds, IPO etc. Zerodha coin is the direct mutual fund service that provided by the zerodha where you can invest in the mutual funds of your choice without having to pay the upfront or trail commission that most mutual fund distributors charge for. Zerodha is also offering to give deep discounts to its users in the mutual funds category which is not a given in the mutual fund industry.

Zerodha Coin

Don’t have a Zerodha account? Clickhere to open one!

Sentinel

Sentinel is a cloud based platform which provides stock market updates on your mobile , web browser and email once you have created an account with zerodha. They also provide price alerts whenever there is a movement in price to its customers. Clients can also set alerts for correlated price movement in stock . eg: Setting up an alert when the price of Infosys moves ahead of its rival TCS.

Small Case

Smallcase, a startup backed by discount brokerage Zerodha has launched thematic groups like ‘GST basket’, ‘monsoon cheer’, ‘rural demand’. A thematic basket consists of stocks in different proportions, which can gain most if the bet on the theme plays out.

Streak

Streak is a web based platform for retail investors who like to code and create algos for their own strategy . You can also backtest your algorithm and check if its a winning strategy and then invest in the markets.

Sensibull

Options trading has long been a black box for most Indian investors given its a pretty recent phenomenon in the Indian banking space which is reason most flounder and lose their money when trading options.

As a result Sensibull from zerodha is here to make Options trading easier, accessible and most importantly profitable for Indian investors by providing them with Option chain, Live Option Prices and Open Interest tables. You can also get your hands on Greeks (Delta, Theta , Vega etc) and Put Call ratio which are essentials for a good risk management.

Pricing

It is very important to know that one of the primary reasons as to why zerodha is a top stock broker in India with the largest number of clients is due to its very low pricing as compared to its competitors.

In this section we will discuss in detail Zerodha’s account opening charges and their brokerage structure which very less than what many full service brokers charge.

Zerodha Account Opening Charges

It is very easy to open an account with Zerodha. However, in order to avail their services you will have to pay the following account opening fees:

Trading Account Opening Charges (One Time)300
Trading Annual Maintenance Charges0
Demat Account Opening Charges (One Time)100
Demat Annual Maintenance Charges300
Zerodha Brokerage Charges

It is very important to note that that zerodha is India’s first discount broker and therefore it doesn’t even require its clients to have a minimum balance in their accounts because its brokerage charges are lower than most of the other brokers. Here is the detailed brokerage structure followed by zerodha across various segments:

EQUITY DELIVERY
ZERODHA CHARGESBrokerage Charges
BROKERAGEZero Brokerage
STT/CTT0.1% on buy & sell
TRANSACTION CHARGESNSE: 0.00325%BSE: 0.003% per trade
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
EQUITY INTRADAY
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTT0.025% on the sell side
TRANSACTION CHARGESNSE: 0.00325%BSE: 0.003% per trade
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
EQUITY FUTURES
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTT0.01% on sell side
TRANSACTION CHARGESNSE:Exchange txn charge: 0.0019%Clearing charge: 0.0002%BSE: 0.003% per trade
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
EQUITY OPTIONS
ZERODHA CHARGESBrokerage Charges
BROKERAGEFlat Rs. 20 per executed order
STT/CTT0.05% on sell side (on premium)
TRANSACTION CHARGESNSE:Exchange txn charge: 0.05% (on premium)Clearing charge: 0.002% (on premium)BSE: 0.003% per trade (on premium)
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
CURRENCY FUTURES
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTTNo STT
TRANSACTION CHARGESNSE:Exchange txn charge: 0.0009%Clearing charge: 0.0002%BSE:Exchange txn charge: 0.00022%Clearing charge: 0.0002%
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
CURRENCY OPTIONS
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTTNo STT
TRANSACTION CHARGESNSE:Exchange txn charge: 0.04%Clearing charge: 0.002%BSE:Exchange txn charge: 0.001%Clearing charge: 0.002%
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
COMMODITY FUTURES
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTT0.01% on sell side (Non-Agri)
TRANSACTION CHARGES
Group A
Exchange txn charge: 0.0026%
Clearing charge: 0.001%
Group B:
Exchange txn charge:
PEPPER – 0.00005%
CASTORSEED – 0.0005%
RBDPMOLEIN – 0.001%
Clearing charge: 0.001%
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore
COMMODITY OPTIONS
ZERODHA CHARGESBrokerage Charges
BROKERAGE0.01% or Rs. 20/executed order whichever is lower
STT/CTT0.05% on sell side
TRANSACTION CHARGESExchange txn charge: 0Clearing charge: 0.002% on buy + sell [₹200/crore]
GST18% on (brokerage + transaction charges)
SEBI CHARGES₹15 / crore

Apart from trading services zerodha also provides its customers with state of the art and optional value-added services, here are the charges applicable to customers who use these services:

ServiceBilling FrquencyCharges
SentinelMonthly / Bi-annually / AnnuallyFree: 0/0/0 | Plus: 50/45/40 | Pro: 200/180/160
StockReports+Monthly / Bi-annually / Annually150/810/1440
ScreenerMonthly / Quarterly / Bi-annually / Annually100/285/540/960
SmallcasePer transaction100
SensibullMonthlyFree: 0 | Lite: 800 | Pro: 1300
StreakMonthlyBasic: 500 | Premium: 900 | Ultimate: 1400
Kite ConnectMonthlyConnect: 2000 | Historical: 2000
Pi BridgeMonthly2000

Zerodha Complaints:

Complaints are a way to gauge the customer satisfaction among the client base. Here are the number of complaints registered against Zerodha over the years:

ExchangeFinancial YearActive ClientsTotal Complaints
NSE2018-19868360244
NSE2017-18540905345
NSE2016-1716558499
NSE2015-166197025
NSE2014-153037917
NSE2013-14175238
NSE2012-1379967

If you want the detailed comparison of Total Complaints by customers against broker, kindly Click on this link


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