If you want to invest or trade you will need a Demat account and a trading account. Upstox, Zerodha and Groww are the top players in the stock market broking industry.
Although there are many websites to tell you about their charges, none tells us a broking company to pick and open an account.
But how will you choose a good broking company for your stock market journey? In this article, I am going to tell you the best broking company / app for you, if you want to trade / invest.
But before that, let’s see what is a Demat account and a Trading account.
Demat Account
For beginners, a Demat account is like a bank account but it stores the shares and mutual funds that you own. It is mandatory for investing and trading as your shares are going to be stored in the Demat account.
Trading Account
Trading Account is for placing orders, basically to trade and invest. The combination of the Demat account and Trading Account makes it possible for you to invest and trade.
We can’t trade / invest only with a Demat account or a trading account. The combination the both is required for investing and trading. All the top broking companies give both Demat Account and Trading Account.
Now let’s jump into the comparison
Comparison
Opening Charge
It’s pretty straightforward, the opening charge is the money you have to pay to your broker to open a Demat account and a Trading account.
- The opening Charge of Upstox is ₹0, you can open an account for free
- The opening charge of Zerodha is ₹200, you need to pay to open an account
- The opening charge of Groww is ₹0, you can open an account for free
But don’t just consider opening charges to pick a broker. Let’s see why.
The truth about opening charges
Why think about where to open an account, where the opening chare is the least, open an account? If you think the same, you need to know the truth about these charges.
Even if the opening charge of a certain broker is ₹0, they will collect the opening charges indirectly. They don’t collect money when you open an account, they generate profits when you place orders. These brokers collect high charges when you trade or invest.
So, in the short term, it may seem good to open an account for free with the free opening charge broker.
But in the long term, you will have to pay many more times the opening charges of another broker who charges for opening an account but takes less charge for an order. But not all the free opening charge brokers collect high charges per trade.
Charges per Trade
Before going to charges per trade, I would like to tell you that there are many taxes you need to pay to place an order. And they are equal to all brokers. Excluding these taxes, let’s look at the extra charges per trade with different brokers.
There are two kinds of orders intraday and delivery. The charges change according to the type of order you are placing. So, we need to know about these two orders.
Intraday Order
Basically, an intraday order is an order in which you buy and sell the stock on the same day. The National Stock Exchange and Bombay Stock Exchange open at 9:15 AM and close at 3:30 PM.
So, you need to buy a stock after 9:15 AM and sell it before 3:30 PM. Intraday orders are for traders. Now let’s look at the charges for various brokers for an intraday order.
- The intraday charge for Upstox is ₹20 or 0.05% per trade, whichever is lower will be charged
- The intraday charge for Zerodha is ₹20 or 0.03% per trade, whichever is lower will be charged
- The intraday charge for Upstox is ₹20 or 0.05% per trade, whichever is lower will be charged
Delivery Order
Basically, a delivery order is an order in which you buy a stock on a day and don’t sell it on the same day. The charges for delivery orders are lower generally.
Delivery Order is for investors. Now, let’s look at the charges for various brokers for a delivery order
- The intraday charge for Upstox is ₹20 or 2.5% per trade, whichever is lower will be charged
- The delivery charge for Zerodha is ₹0 per trade, you don’t need to pay for a delivery order with Zerodha
- The delivery charge for Groww is ₹20 or 0.05% per trade, whichever is lower will be charged
You can clearly find that Groww and Upstox which didn’t charge for account opening are charging now. On the other hand, Zerodha charges for account opening and doesn’t charge for an order.
So, in the long term, Zerodha wins (for delivery orders).
AMC
AMC means Account Maintainance Charges. These are the charges you will need to pay to your broker to continue using their services. These charges are collected every year by most brokers. Even AMCs vary from one broker to another broker.
These are the AMCs for Upstox, Zerodha and Groww.
- The AMC for Upstox is ₹150
- The AMC for Zerodha is ₹200
- The AMC for Groww is ₹0
By the way, the account maintenance charges change very often. So, you need to search for the current account maintenance charge while opening an account.
Conclusion
We can’t say a broker is perfect for everything. We can recommend a broker according to your use. So, here are my recommendations for you to pick a broker.
Trading
In trading, you have to place many Intraday orders. So for Trading, all the brokers charge nearly equal.
Based on the interface and application, I am recommending Zerodha as you can add many kinds of GTT, Bracket, AMO etc…orders. These services are not available with the other brokers.
So, Zerodha stands out in Trading.
Open your Zerodha Account Here: Zerodha.com
Investing
In investing, you need to place delivery orders. The charges for delivery orders vary from broker to broker.
Zerodha wins in investing as it takes ₹0 for delivery orders.
Open your Zerodha Account Here: Zerodha.com
Even though you may say, Groww doesn’t charge account maintenance charges. So, it is good, but it charges for each order you place. And also according to the reviews in Quora, I found that Groww’s user interface (app) is not as good as compared to Zerodha’s app and website. So, Zerodha wins again.
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