Zerodha Review 2020, Brokerage Charges, Trading Platforms & more

Zerodha Review 2020

zerodha

Zerodha is considered among the best discount brokers in India. Founded in the year 2010 in Bangalore, Zerodha is a leading stock broking company that enjoys multi-city presence across the country. The discount broker is a prominent member of National Stock Exchange of India (NSE), Bombay Stock Exchange (BSE), and Multi Commodity Exchange (MCX).

Zerodha has an overall client base of more than 10 lakhs and claims to manage daily turnover of INR 12k crores in equities and INR 1K crores in commodities. The country’s leading discount broker also offersVarsity, a free online portal on basic and advanced education on trading. The discount broking firm dethroned long-time market leader ICICI Securities to become the best and largest brokerage firm in India.Some of the big competitors of Zerodha are RKSV, IIFL, Finvasia, and Angel Broking.

The value-centric initiatives taken by the discount broking firm helps the brand easily create trust among the current and possible client base. At the same time this discount stock broker, as an employer, has more than 1000 employees all across the country.

According to the company’s financial results by Zerodha Review, Zerodha has acclaimed a Profit After Tax (PAT) of over INR 100 Crore for the financial year 2018-19. These impressive figures clearly indicate how successful the discount broker is today’s stock broking market. The annual review of Zerodha is over $ 100 million.

The most distinctive part of Zerodha is that it invests heavily in embracing innovative and user-centric amendments in regard to its offerings. Some of the examples are Coin and Smallcase. This also means that it is also the safest discount broker in India. With Zerodha Coin account, you can easily invest in Government Securities, Bonds and T-bills.

Among various products of Zerodha, Coin mutual fund platform is something that has got the best response so far. Over 1.5lk investors who have invested over Rs 3400 crores in direct mutual funds on Coin and have already saved over Rs 30 crores in commissions they would have otherwise paid through regular mutual funds. Coin is now one of the largest online mutual fund platforms in India (across regular and direct).

The competitive brokerage rates at Zerodha along with cutting-edge trading platforms make the discount broker a hot favorite option among both the investors as well as traders.

Zerodha allows you trade and invest in the below given segments:

  • Equity
  • Derivative Trading
  • Currency
  • IPO
  • Mutual Funds
  • Commodities
  • Government Securities (Latest Inclusion)

In recent times, Zerodha has started offering 3-in-1 demat account in association with IDFC bank.

Here it is also necessary to mention that those days are gone when Zerodha was having a tie-up with IL&FS as today Zerodha has its own Demat account for its clients. The CEO of Zerodha is Nitin Kamath.

Zerodha is largely considered as India’s first and no. 1 discount broker by volume, the customer base and overall growth.

Alike other web-based stock trading companies, Zerodha offers trading services to buy & sell stocks, Futures & Options (in Equity, Currency & Commodity segments). Zerodha has developed its in-house trading application with the name of ‘Kite’ and back-end software name ‘Console’. All trading applications are available in trading terminal, website and mobile trading.

Types of Accounts

Primarily, Zerodha offers three types of accounts to its users.

Demat Account

A Demat Account is an account that enables investors to put their shares in an electronic form. Stocks in Demat account are maintained in dematerialized form. Dematerialization refers to the process of changing physical shares into electronic format. A demat account can be opened with no balance of shares.

If you have shares lying at any other broker, you can transfer the same to your demat account at Zerodha. In addition, there is an option to dematerialize your physical shares at Zerodha.

Trading Account

A trading account is what you need to buy or sell securities in the share market. Do remember that this account will be different from your demat account.

For intraday trading, you just need a trading account and demat account is not required. This system is applicable across all stockbrokers in India, though Zerodha may compel you to open a demat account in any form.

Commodity Account

If you’re planning to invest in commodities, you should open a commodity account with Zerodha separately. In addition, you would be needed to open a demat account as opening a commodity account separately won’t work.

Do keep in mind that charges for these accounts would be in two types – opening the account and maintaining the account.

Process to Open an account at Zerodha

Zerodha Account opening process is fully online and faster using Aadhar-Esign. Account opening generally takes 24–48 hours after submitting the application and here is step by step process to open account with Zerodha.

  1. Aadhaar Number, in case the online application form which will be electronically signed.
  2. PAN Card to ensure that the PAN Number and Name is entered in correctly,
  3. Scan of cancelled cheque with your name OR your latest bank account statement, which is required to be uploaded. Please note that in case the cheque does not include your name and in case the bank proof does not mention the IFSC & MICR code, your application will be rejected. It’s means cheque should be personalized.
  4. To enable the Futures and Options segment, either one of the following is to be kept ready which needs to be uploaded:
    1. A copy of your latest 6-month Bank Statement or Passbook; OR
    2. A Copy of your form 16; OR
    3. A copy of your net worth Certificate; OR
    4. A copy of your last salary slip; OR
    5. A copy of your latest ITR acknowledgement; OR
  5. Personalized Signature

Zerodha Trading Platforms

When Zerodha was launched initially, the broking platform was heavily dependent on a group of outsourced trading applications that were developed outside and away from the control of the discount broker. Over time, when the user based increased, Zerodha came up with its in-house trading applications that not only allow it to gain more control over stock trading but also results into improved user experience, performance, usability and integrations.

Let’s look at Zerodha’s top trading platforms

Zerodha KiteZerodha Kite

Zerodha KITE is a leading trading software developed by Zerodha. It enables customers to trade in stocks at BSE, NSE and MCX. It’s a front-end application which is built in-house by Zerodha engineers. KITE platform has 3 main products, all for free to its customers:

  1. Kite Web

A web-based trading application (works on browser like a website) with streaming quotes, advance charts, keyboard shortcuts, elegant UI and all available orders.

  1. Kite Mobile App

Zerodha Kite App is available for Android and iOS. Kite Mobile is a sturdy and easy mobile trading app. The Kite Mobile App give provides access to all the features available in Kite Web.

  1. Kite Connect API

Kite APIs are easy HTTP/JSON APIs for developers who would like to develop their own front-end platforms or tools to trade. These API’s are provided as ‘platform as a service’.

Benefits of Zerodha Kite

Kite is a great trading platform loaded with several features which are not offered by any other discount broker. As Kite is under active development, Zerodha is taking in 100’s of new features every new version released. Here are a few key features which make Kite a distinctive trading experience.

  • Dashboard / Account Summary
  • Market Watches
  • Streaming Quotes
  • Browser Notifications
  • Market Depth View with Streaming Updates
  • Floating Order Window
  • Exit multiple orders/positions in one click
  • Multiple chart view (4 charts on the same screen)
  • Trade from charts (place trades from popped out charts)
  • Order Types: Regular, CO, BO, AMO

Zerodha PI

Zerodha Pi 2Zerodha Pi

 

PI by Zerodha is a desktop trading application and boasts of features like trading, charting, scripting and analysis. One needs to download the software and install it on his computer system. Some of the great features of this trading application:

  • High speed order execution
  • Basic and technical analysis including charting with 70+ technical indicators
  • Market watch option
  • Customized alerts and notifications

Zerodha Trader

Zerodha Trader
Zeroddha Trader

It is basically a customized version of the terminal-based application – NEST Trader. The application allows you perform trading across segment including currency, commodity, equity, and derivatives. Its salient features are:

  • Market Watch
  • Multiple order types
  • Span calculator
  • Shortcut keys

Zerodha Coin

Zerodha Coin is India’s biggest direct mutual fund platform that allows you buy direct mutual funds online with no commission pass back, straight from asset management firms. Your mutual funds, stocks, currencies, bonds, and more, all in your Demat account.

Over the last 16 months, 100,000+ clients have put in over Rs 2000 crores in direct mutual funds and saved tens of crores in commissions that they would have otherwise paid a regular mutual fund platform.

Zerodha Streak

Streak is really great, particularly for technical traders. Their backtest feature is really outstanding. Earlier people backtest by browsing through charts and it used to take a lot of time to really validate a strategy before delivery. But Streak has reduced hours and hours of work.

Zerodha smallcase

Zerodha smallcase is actually a bonding between the discount broker and smallcase with an objective to enable thematic investment options to clients. Users just need to open a demat account to access thematic investment options right on their portal.

This platform is best for those who find it difficult to carry out fundamental analysis and look for precise investment advisory.

Zerodha Sentinel

Zerodha has recently launched a platform known as Sentinel, to help the traders, invest efficiency and lucratively. The Sentinel platform is a trigger notification system which delivers notifications on any triggers included by the user in the Sentinel Platform.

It comes in both free as well as paid versions. The free version offers 30 triggers while the paid version offers 100+ triggers with advanced alerts mechanism.

Zerodha Varsity

Zerodha Varsity is an avenue where one can choose to learn how to read central of any specific stock for long term investment. And if you are day trader then they will make you learn what’s stop loss how to comprehend market trends and earn big from them. Being Rich from Stock market is not journey that has short cuts.

It is typically a package of comprehensive knowledge of stock market broken into different modules on a range of topics from basic knowledge to technical analysis, fundamental analysis, Trading Psychology, Risk Management, etc.

Zerodha Customer Care

Zerodha primarily offers customer services to its clients through following communication channels:

  • Phone
  • Email
  • Social Media

This is one area where Zerodha lacks its edge as there are limited communication channels to avail the customer service. Another issue is that the customer service team lacks robustness and dexterity that is the building pillars behind success. This is the region where Zerodha needs to work a lot by improving their customer service support. Believe it or not but this element plays a vital role in keeping your customers happy.

In some cases, even the CEO, Nitin Kamath has been seen involved into resolving some of the queries by the users. His direct involvement is really a benchmark that should be taken forward across the team.

Zerodha Pricing

Zerodha is the pioneer of the discount broking concept in India and is the largest discount broker in terms of active clients. Already 10+ lakh clients have chosen Zerodha. 5% of daily retail trading volumes across NSE, BSE, MCX.

Zerodha has a very easy pricing structure. They offer free equity (shares) delivery trades and charge a maximum for Rs.20 for intraday trading, F&O, currency and commodity trades. Their brokerage calculator makes it quite simple to calculate charges; a concept brought in the country by Zerodha.

Brokerage Charges

  • Intraday Brokerage for trading Equities – INR 20 or 0.01% of each traded amount whichever is lower.
  • Brokerage on Equity Future trading – lower of the 0.01% or INR 20 for each trade.
  • Brokerage on Equity options – 0.01% or INR 20, lower of the two on per trade basis (turnover basis)
  • Brokerage on Currency Futures – 0.01% or INR 20, lower of the two on per trade amount
  • Brokerage on currency Options – 0.01% or INR 20 per trade whichever amount is the amount.
  • Brokerage on trading commodities – 0.01% or INR 20, the lower of the two amounts on each trade basis.

Other charges

  • STT – For Equity delivery, it is 0.1% on both buying and selling of the equities and for intraday trade, it is 0.025% on the selling side. In case of futures, it is 0.01% on the sell side and for options, 0.05% on the premium of the sell side
  • Transaction/turnover Charges – For equity delivery on NSE it is INR 325 for each 1 cr and on BSE it is INR 1 for each trade on both sides. For Intra-day, the charges are same on both the exchanges. For Futures, it is INR 210 per crore on NSE and INR 1 for each trade (both side) and for options, it is INR 5300 per crore and INR 1 on both side per trade on the premium of options.
  • GST – For both Intra-day and Delivery on Equity and F&O it is 18% on the sum of brokerage value and transaction charges.
  • SEBI Charges – INR 15 per 1 crore for both intra-day and delivery. It is same equity as well as F&O.
  • Stamp Charges – It is according to the rules of the state for both equities and F&O on both delivery and intra-day.

Hidden Charges (if any)

  • Trade on Call facility @ INR 20 per trade.
  • INR 20 for every placement which is not cleared off on the orders executed for MIS/BO/CO.
  • INR 20 as extra charges for courier of Physical copies of contract notes.
  • If you enable SMS option for trader alerts – INR 1 for equity and Futures and options and currency as well and INR 0.50 for commodities.
  • INR 9 for fund transfer for Instant payment gateways for twenty-two
  • DP charges for equity delivery selling – INR 8 per transaction.

Zerodha Margins

Though there is not much scope of leveraging on buying or selling, there is still some space.

Equity 4 to 10 times for Intraday
Equity Futures 40% of exchanged prescribed margin
Equity Options 40% of exchanged prescribed margin for selling. No margin on buying
Currency Futures 100% of exchanged prescribed margin
Currency Options 100% of exchanged prescribed margin
Commodities 50% of exchanged prescribed margin

 

Zerodha Research

Zerodha has its in-house research team which always strives to delight its users with some great elements such as Open Trade where users can connect with big traders and learn trading secrets in a real-time basis.

Zerodha has also joined hands with Thomson Reuters to make its clients access advanced reports termed as StockReports+. Using this, Zerodha clients can register to various paid plans and receive different reports of several listed firms.

These plans are based on particular frequency you look for to register with:

  • 1 month – INR 150
  • 6 months – INR 850
  • 1 year – INR 1440

Zerodha Open Trade

Open Trade is an extension of Zerodha’s open education enterprise, Varsity. The broking firm has selected and highlighted star traders from its client base by screening their real portfolios and trading history. On Open trade, clients can get real-time notifications when they perform a trade with details of the trade.

Zerodha’s star traders have been steadily profitable with impressive track records. Trading is a skill, and it may not be simple to make someone learn it. However, seeing a skilled trader and watching their portfolio submissively without meddling with their trades may help you comprehend what makes them win.

60 Days Challenge

Zerodha presents the 60-day challenge which gives traders on equity (stocks and F&O), currency, and commodity exchanges an opportunity to put their trading skills to test.

All you have to do is to open an account and be profitable after all expenses for a period of 60 days. If you win, Zerodha will refund the brokerage that it has cut from your trading in those 60 days and certify you. Recently, Zerodha have stopped the refund part.

It is a marketing practice to invite more participation in trading.

Referral Program

Zerodha referral program has helped lot of their clients to make earn through referral program. Also, it helped Zerodha to gain more client without putting money on advertisement, due to which they are able to operate at competitive cost and also charge less to their customer.

If you refer any of your family/relatives/friends to Zerodha, you earn 10% of the brokerage they pay to Zerodha. Suppose per order your friend is paying Rs 20/- , so you get Rs 2/- on his each trade.

The Conclusion

Zerodha Securities is one of the best discount brokers in India for trading in Stock, Currency Derivative and Commodity segments. As it brought the concept of discount broking in the country, it still rules the space in many aspects. Due to its strong focus on customer education, brokerage plans, and value delivery, Zerodha is a clear winner in the category.

However, customer service is what needs to be improved. This is because its clients still have complaints regarding unresponsiveness and unprofessionalism or the customer service department. So all the features define that the zerodha is trustworthy or zerodha is better for beginners.

 

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