Best Discount Stock Brokers in India
If you plan to invest in stocks in India, you will need to utilize the services of a stockbroker. If you are a casual investor, with moderately sized capital, hiring the services of a discount broker is the best option. Since you are likely to make trades sporadically and are investing in standard investments, you will hardly need advice at length.
If you are a high net-worth investor with thousands, if not millions, in the stock market, then getting discounted services will not help you. Besides, you are likely to get discounts automatically on bulk trades. Therefore, a discount broker makes little sense in this case. What you require is a money manager.
Discount brokers carry out the transactions and charge customers significantly lower fees than the regular broker firms. This is beneficial since they provide limited services or advice as compared to the traditional brokers. The discount brokerage is best suited for the investors who can make their own investment decisions. This is not to say that these firms will not offer advice if they are asked to do so only that the client would have to pay extra regarding higher trading fees and commissions. These brokers are usually paid either salary or commissions or even a mix of the two.
So if you do not have adequate knowledge of the market, then you should opt for a traditional broker. But if you decide to opt for a discount broker, you should do some groundwork. You need to find out if the firm requires you to open a minimum opening deposit, and if so, for how much.
What to look out for when selecting a discount broker
There are many different variables to selecting the right online broker or trading platform. We all have different needs and different expectations. Some of the main points to consider are :
*Fees –brokerage charges , STT, CTT, Transaction Charges, DP Charges, Account opening fees,AMC.
*Trading Platform- Desktop Trading software , Mobile app, Web trading platform , Call and trade.
*Terms & Conditions – margin ,order Facilities
*Customer Service and Account Statements –Trading Reports ,order reports
*Broker knowledge- broker certification ,Exchange Registration
Advantages of online Brokerage
Many offer commissions up to 75%. If you are a small trader, meaning you do not trade with large cash amounts, the cost of commissions can eat into your profits. Keeping your commissions as low as possible will help you have a higher return in the long run.
With a standard broker, you would have to call your account rep to make trades, deposits for you. With a discount broker you have access to your trading account anywhere you have an online software. Some now even offer trading via a demat account. In most cases, you can link your checking account to your trading account and move money in and out electronically. No more having to write and mail checks.
Commission based account reps tend to steer you toward specific stocks. Sometimes it is hard to tell if they are genuinely looking out for your best interests. Online brokerages do not offer advice, so every trade you make is based on your research. Sometimes guidance can be beneficial, but you have to balance that with being pushed into something you are not comfortable with.
*New account promotions.
Many online sites are offering promotions where you can get something free when opening an account. These bonuses are a great incentive to open a new account for investors if you are satisfied with their trading environment and feature set.
Probably the most straight forward service provided by the discount stock broker is the purchase and sale of stocks. A stock is a financial instrument that entitles you to a claim on a portion of the assets and earnings of the corporation in which the stock is purchased. Stocks are sometimes referred to as shares or equity.
Options in the stock market are slightly more complicated than stocks. When you purchase an option, you are creating a contract with the option writer. This contract provides you with the opportunity to purchase a stock or other financial instrument at a set price within a determined time period.
Discount brokers also commonly offer other investment products to their customers. You might invest in a mutual fund through this type of broker. A mutual fund is an instrument that pools the funds of multiple investors to increase buying power. You receive a return on your investment in the fund in proportion to the amount of money you have contributed. The discount stock broker may also offer fixed income products, such as bonds and certificates of deposit.
All that said discount brokerage offers the perfect opportunity for the people who want to participate in the stock market in India at the lowest possible costs and with the decision made at their discretion. So if you decide, a discount broker is just the thing for you, just be sure that the firm you choose can meet your business requirements at best possible costs.