(We are told one price but later we realize that we are paying another is what infuriates many)
Hi fellow investors, everyone is keen to learn investing and this is one of the hottest topic. Before we dive into the subject first let’s understand about stock broking firms what do they do and how many types of broking firms are available in India.
1. Stock Broker:
A registered member of the stock exchange be it an individual/ organisation and are given license to involve in the securities market instead of its clients. They participate directly in the stock market on behalf of their clients and for the service rendered they charge a commission.
Now as an investor it’s our responsibility to know how much we are paying in the form of account opening charges(AOC), commissions and annual maintenance charges (AMC) and charges involve per trade. Before that we need to understand that there are two types of stock brokers in India.
1. Traditional Brokers ( Full Service Brokers) — ICICIDirect, Kotak Security, HDFC Sec, Sharekhan, Motilal Oswal etc.
2. Budget Brokers (Discount Brokers) — Zerodha, Upstox, ProStocks, RKSV, Trade Smart Online, Achiievers, SAS online etc
To understand in detail, let’s take a small comparison between Full Service Brokers vs Discount Brokers:
2. My own Experience:
1. I started my investment journey in 2009 with ICICI Direct(Full — Service Broker) where I have never utilised their research recommendations or advisory services and soon realized that it was too expensive compared to the other discount brokers.
2. As I am not at all using their advisory facility I have realized that it does not make any sense in paying extra brokerage charges to ICICI Direct.
3. I then shifted to Upstox(Discount Broker) where the charges are way less than I have imagined even and the AOC(Account Opening Charges) are NIL and all equity delivery charges are also NIL with very less AMC charges.
4. Comparison between the both is tabulated below for quick reference:
3. Whom to choose (Full Service Broker vs Discount Broker)?:
(There is no perfect answer to the above question, however to assist you in your decision, please complete the below exercise)
Depending on the above answers it is you who have to take the final call.
4. Final words:
Those who are already having demat accounts with Full Service Brokers like ICICI Direct, HDFC Sec, SBI Demat account and trade very less and want to save on yearly maintenance charges I suggest you to convert your account to BSDA(Basic Services Demat Account), see the benefits of the same in the below table.
Application for BSDA will be available with respective Full Service Brokers, you can avail the same.
Notes:
A. To know more about Finance & Wealth Generation, join my whatsapp group: Ganesh Komma VIP Updates.
B. To get the respective BSDA forms and to know the step by step detailed process (Completely Online Application Process) on how to open the account with Upstox discount broker(Nil AOC & Zero Balance 3 in 1 Savings Account) you can join my whatsapp group(Ganesh Komma VIP Updates).
Please copy this link and join https://chat.whatsapp.com/BlPdRFUKWwq6Usup7V6RrM
C. Link to open Free 3 in 1 (Upstox A/c) for Demat, Trading A/c & Savings A/c of Indusind Bank(Till Dec 31, 2020):
Referral link: https://upstox.com/open-account/?f=HB6503
App Referral Link: https://bv7np.app.goo.gl/WBgcK3PF3CFZkVpt6
7 thoughts on “How to save huge “FEES” that you are paying to stockbrokers in simple easy steps?: (Full-Service Broker vs Discount Broker)”
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