Ever since the advent of the pandemic and the stock market crash that followed, retail investors have been flocking to Dalal Street in hordes for better returns, armed with the knowledge gained online during the lockdown months. As a result, brokerages have recorded phenomenal growth in opening of new demat accounts and trading volumes.
For a new investor, it can be difficult to choose a broker according to their requirements. Should one stick with a traditional full-service broker, or opt for modern-age discount brokers to save costs? Well, in alignment with the old adage “strength in numbers”, we chose to look at the top brokerages firms in India, and compare their strengths and weaknesses.
Top 5 Stock Brokers In India Who Can Help You Invest In Share Market Online in 2021.
Zerodha is the leading discount broker and market leader in the Indian brokerage industry. It charges the least brokerage fees for equity, mutual funds, futures and options, and commodity trading. It charges 0 brokerage on delivery-based equity trades, flat Rs.20 for options trading and 0.03% or Rs. 20 (whichever is lower) for all other segments. Zerodha shines as it offers an easy and seamless platform to start trading for an online retail investor, with minimal costs. However, Zerodha doesn’t currently support HNI IPO applications, and has a charge of Rs. 20 per trade for call and trade, which makes it unsuitable for investors who may have difficulties keeping up with its technology-driven approach.
Upstox, founded in 2011 and is backed by Ratan Tata, is the second largest discount brokerage in India. It has a maximum brokerage of Rs. 20 across all segments, and has charges similar to Zerodha. The difference is that Upstox provides much higher leverage than Zerodha, and has a lower annual maintenance charge. However, unlike Zerodha, Upstox doesn’t support BTST (Buy-Today-Sell-Tomorrow) and GTC (Good-till-cancelled) trades. Upstox is also one of the best online discount brokerages in India, and offers an excellent route to investing for an online retail investor. However, both Zerodha and Upstox charge Rs. 20 per trade for call and trade and lack a nationwide physical presence, which is compensated by their exceptional technological performance.
Founded in 1987, Angel Broking is one of the most established brokers in India. Full-service broker turned discount brokerage, Angel Broking has a flat charge of Rs.20 per trade on all segments except equity delivery, which make it infeasible for trading in small amounts. It also charges Rs. 20 for call and trade trades. What differentiates Angel Broking from other discount brokers is that it retains its network of sub-brokers and has a physical presence across the country. Also, their team of research analysts provide fundamental and technical research and guidance, which can help the average investor generate better returns. Hence, one can benefit from the stock advisory service at Angel Broking, and enjoy a smooth online and offline interface with a lower cost of trading compared to other full-service brokers.
The market leader before the rise of Zerodha, ICICI Direct still retains a prominent position in the stockbroking industry of India. Being a bank-based brokerage, ICICI offers a 3-in-1 account, allowing seamless transactions between demat, trading and bank accounts. However, it has a high minimum charge of Rs. 10-40 per trade across all segments. ICICI Direct is a reputed and trustworthy name in the brokerage industry, and provides high quality research and stock ideas backed by top award-winning researchers, which make it worth considering for HNIs and clients who don’t wish to trade with online discount brokerages.
Like ICICI Direct, HDFC Securities is also an established player in the brokerage industry, and is currently one of the top 5 brokers of India. They also offer a 3-in-1 account, and have plans offering its exclusive research on stocks. It has a brokerage of minimum Rs.25 per trade across all segments, and offers both offline and online trading, with no call and trade charges. Being the largest private bank in India, HDFC Securities offers both integration and convenience with its brokerage service. As a full-service broker, it may have higher charges, but also provides high quality research and services for its clients.
To conclude, the top 5 brokerages of Dalal Street offer various unique propositions for their clients, and one must choose a brokerage according to their requirements and trading abilities. Small investors often turn to discount brokerages to save costs, missing out on the valuable research and advice offered by full-service brokers. Likewise, by trading in excessively high or low volumes in high-cost brokerages, investors may generate far lesser returns than their maximum potential.
An interesting point to note is that there are currently no restrictions on opening multiple demat accounts by a single individual. This can allow investors to benefit from high-quality investment research and ideas from full-service brokers while enjoying the cost advantages of discount brokerages, though it may lead to higher annual maintenance costs. An investor must choose their broker carefully, as it can have a major impact on their entire investment journey.
So, which broker is the best according to you, and why? Let us know in the comments below!