Zerodha Review 2021 – Is Free Investing Legit? (No 1 Stockbroker?)
A complete Zerodha Review 2021– Brokerage, Trading Platform & More: Zerodha is the biggest discount broker in India and perfect for traders & investors looking for low brokerage, easy interface, and reliable trading platform. It offers a zero brokerage for delivery equity & direct mutual fund investments.
For all intraday, Futures & Options, currency, and commodity trades across NSE, BSE, MCX, it offers a brokerage of Flat ₹20 irrespective of the trading volume. It doesn’t matter whether you trade for Rs 1 lakh or 1 crore, you have to pay a flat low brokerage of Rs 20 per trade. Therefore, you can save a lot of brokerage charges on your trades using Zerodha as your broker.
In this Zerodha review, we will discuss the brokerage charges, account opening charges, maintenance charges, trading platforms, products, my personal experience of using Zerodha & more. By the end of this post, you’ll have a complete understanding of Zerodha trading services and whether this broker is right for you or not. Let’s get started.
Zerodha Review –Brokerage, Charges, Trading Platforms & More
There are two types of stockbrokers in India. Full-Service brokers and Discount brokers. The full-service brokers offer a trading platform along with advisory. However, their brokerage charges are high. A few major full-service brokers in India are HDFC Securities, ICICI Direct, Motilal Oswal, etc.
On the other hand, discount brokers offer trading platforms with minimum brokerage charges. Nonetheless, they do not provide advisory services. The biggest advantage of a discount broker is that it saves a lot of brokerages for the traders/investors. On all other prospects, like performance, computerized trading systems etc- both offer similar facilities.
An important point to know here is that all the brokers- Full service or discount brokers are licensed and regulated in India by regulating bodies like SEBI.
Zerodha is a leading discount broker in India in terms of daily trading volume, growth and customer base. It is one of the most technologically advanced and cheap stockbrokers. Zerodha has over +1 million clients and contributes to over 10% of daily retail trading volumes across NSE, BSE, MCX.
Ironically, the term ‘Zerodha’ is derived from the fusion of an English and Sanskrit word. ‘Zero’+’Rodha’ where ‘Rodha’ means barrier. Overall, Zerodha means ‘Zero Barrier’.
It was started by Nitin Kamath, an Engineer by qualification, in 2010. Nithin bootstrapped and founded Zerodha in 2010 to overcome the hurdles he faced during his decade long stint as a trader. He was named one of the “Top 10 Businessmen to Watch Out for in 2016 in India” by The Economic Times for pioneering and scaling discount broking in India. Here are a few of the famous awards won by Zerodha recently:
— National Stock Exchange (NSE) “Retail brokerage of the year 2019” (& 2018)
— Outlook Money “Retail broker of the year 2017”
— Ernst & Young “Entrepreneur of the year (Startup) 2017”
2. Zerodha Brokerage Charges
Zerodha offers trading services to buy and sell stocks, futures & options in equities, commodities, and currency segment. Here are the Zerodha brokerage charges:
– Free equity delivery
All your equity delivery investments (NSE, BSE), absolutely free — ₹0 brokerage.
– ₹20 intraday equity and F&O trades
₹20 or 0.03% (whichever is lower) per executed order on intraday trades across equity, currency, and commodity trades across NSE, BSE, and MCX.
|Equity Delivery||Rs. 0 (FREE)|
|Equity Intraday||Lower of Rs. 20 per executed order or 0.03%|
|Equity Futures||Lower of Rs. 20 per executed order or 0.03%|
|Equity Options||Flat Rs. 20 per executed order|
|Currency F&O||Lower of Rs. 20 per executed order or 0.03%|
|Commodity||Lower of Rs. 20 per executed order or 0.03%|
1. You can use this Zerodha Brokerage Calculator to get more ideas.
2. Apart from brokerages, there are also a few other charges that you have to mandatorily pay on your transactions like Exchange transaction charge, STT, SEBI turnover charges, GST, etc.
You have to pay these charges no matter which stockbroker you prefer to trade in stocks and that too on both sides of transactions i.e. while buying and selling. However, the brokerage cost can be controlled by choosing a discount broker. For example, in the case of Zerodha, you can notice the total brokerage of Rs 40 for both sides of Intraday equity trading, even though the total turnover is Rs 8.4 Lakhs.
You can have read this blog post to understand the different charges while trading in stocks.
3. Zerodha Account Opening Charges & AMC
Here are the account opening charges for Zerodha
- Equity Trading Account: ₹200
- Commodity Account:₹100
If you want to trade in both equity and commodity, then you need to pay an account opening charge of Rs 200+Rs 100 = Rs 300. Anyways, if you are just interested in trading in stocks i.e. equities, you can open demat and trading for equity account at Rs 200. The demat account annual maintenance (AMC) charge is Rs 300 per year.
4. Zerodha Products & Features
Zerodha has built its own trading applications for the customers. It offers different trading terminals, websites, and mobile apps (Android/iOS) which are free for the customers.
— Kite 3.0
Kite 3.0 is a modern technology-based trading platform with streaming market data, advanced charts, an elegant UI, and more. It is a minimalistic, intuitive, responsive, light, yet powerful web and mobile trading application offered by Zerodha. Kite provides Bandwidth consumption of fewer than 0.5 Kbps for a full market watch, extensive charting with over 100 indicators and 6 chart types, advanced order types like Brackets and cover, millisecond order placements, and more.
Overall, Kite provides an excellent experience to the users through its groundbreaking innovations presented with hassle-free usability.
— Kite mobile
This is a mobile version of KITE for a seamless experience for mobile-users and available in both Android and iOS devices.
Zerodha Coin is a platform that lets you buy mutual funds online directly from asset management companies. This platform is absolutely free since August 24, 2018. Here, you can make your investments without any commissions.
With the help of Zerodha Coin, you can have Direct mutual funds in DEMAT form, with the convenience of one portfolio across equity, MF, currency, etc. Moreover, it also provides a Single capital gain statement, P&L visualizations, and more. This Coin by Zerodha has made investments through SIPs really simple and flexible.
Other Partner Products
Apart from the above products, Zerodha also offers a few other partner programs:
- Smallcase: This thematic investment platform is powered by Kite Connect APIs. Smallcase helps users to invest in different themes by intelligently providing weighted baskets of stocks in each theme.
- Sensibull: This is an options trading platform which offers simplified options trading for new investors by providing powerful trading tools. Sensibull aims to make options trading safe, accessible, and most importantly, profitable for all.
Besides, Zerodha has also started a few educational initiatives to improve financial literacy and increase the participation of the common people in the financial world. Here are a few other products offered by Zerodha
- Zerodha Varsity: An educational platform to educate people about investing and trading. Zerodha Varsity offers free modules on Technical analysis, fundamental analysis, futures, options, risk management, trading psychology & more. Recently, Zerodha Varsity also launched its Varsity mobile app.
- Trading Q&A: An online forum powered by Zerodha to answer people’s most troublesome investing and trading questions.
5. Pros and cons of Zerodha Discount broker
Here are a few advantages and disadvantages of using Zerodha trading platforms:
Pros of Opening Account with Zerodha
- Zero Brokerage Charges for Delivery
- Flat Charge for Intraday (Rs 20 or 0.03% whichever is lower per executed order for everything else)
- Same pricing for across all exchanges
- No upfront fee or turnover commitment
- Z-Connect, interactive blog, and portal for all your queries
- Trading, charting, and analysis, all rolled into one next-generation desktop platform Pi.
- Minimalistic, intuitive, responsive web-based trading platform Kite
- No minimum balance required to open Zerodha trading account
- Invest in direct mutual funds with same demat account through coin
Cons of Opening Account with Zerodha
- No advisory services or research report.
- 3-in-1 account (Saving+Demat+Trading) not available.
- Online IPO investment not available. (Now, Zerodha customers can invest in IPO’s through UPI payment. Read more about Zerodha IPO applying process here)
Note: Zerodha has recently started offering Zerodha IDFC FIRST Bank 3-in-1 account. However, to open a 3in1 account at Zerodha, you need to have an existing account with IDFC FIRST Bank. Accounts can only be opened online. Read more here.
6. Is Zerodha a Reliable Stockbroker? And is Free investing legit?
Is Zerodha safe for long-term investments? This is one of the biggest questions that come in the mind of first-time investors. Obviously, HDFC Securities, ICICI Direct, SBI cap, Kotak securities, etc are big brands in the name of the broking industry and been in the market for decades. Hence, they have built greater trust compared to Zerodha, especially for the ones who have never heard its name before.
Anyways, Zerodha, the discount broker, originated only in 2010. Therefore, if you’re not involved in the share market investments/tradings in the last decade, it’s no surprise to say that you might have not known this broker. However, in the short span of around 10 years, this broker has been able to beat all the big traditional brokers. Currently, Zerodha is the biggest stockbroker in India, based on the number of clients (over 15 lakh users), followed by ICICI Direct and HDFC securities ranking second and third.
Now, answering your question, Yes, Zerodha is safe and reliable. In fact, since origin, Zerodha has never faced any case of major violations from SEBI or any of the other exchanges. It is a profitable private company with no debts or liabilities. Here are a few points why Zerodha is safe and reliable for investors and traders.
- Zerodha is a zero-debt financial services company. There is no borrowing of any kind.
- There is no credit risk, less than 5% of Zerodha’s own capital is lent to customers in any form.
- Zerodha own funds in the business are greater than 25% of all client funds put together.
- Their ratio of ‘complaints to active clients’ is among the least on the exchange.
- Zerodha is profitable as a business and has enough reserves to sustain, even if there was an extended downturn in the economy.
Moreover, Zerodha is partnered with Central Depository Services Limited. CDSL’s main function is the holding securities either in certificated or uncertificated form, to enable the book-entry transfer of securities. Therefore, when it comes to the security of the shares in your demat account with Zerodha, you do not need to worry at all. The stockbrokers are just the agents of depositories.
Your stocks are actually held by central depositories and not by the depository participants (brokers). Therefore, even if something didn’t work out well with Zerodha, your stocks in the demat account are safely intact with CDSL. In short, Zerodha is completely legit and reliable for your trading or long-term investments in the Share market.
7. My experience of using Zerodha
It’s been over three years since I’m using Zerodha and I’m satisfied with the trading services provided by Zerodha.
Initially, I started with ICICI direct as my broker, but later I switched to Zerodha when I realized that I was paying way too much brokerages for my trading transactions.
Most beginners do not consider the brokerage charges while calculating the profits. I use to make the same mistake. And that’s why many times the final profits in my bank account (after deducting the brokerage and other charges) disappointed me as it was considerably lower than what I calculated in my head. I wish I had switched to a discount broker earlier as it could have saved me a lot of ‘unnecessary’ brokerages and moreover trading experience is even better on Zerodah. Nonetheless, I use Zerodha for making all my stock investments now.
Besides, there was one ‘cons’ of using Zerodha as a broker which bugged me in the past. And it was not having the facility for the customers to directly invest in Initial public offerings (IPOs) through the Zerodha dashboard. But this issue is also solved by Zerodha. Investors can now apply for IPOs directly within the Zerodha console. And the best part is that the process is really simple.
Finally, a lot of people complain that Zerodha doesn’t provide advisory services or buy/sell calls. I believe that one should never invest or trade based on the broker’s recommendation. There’s a conflict of interest here as the brokers will always make money when you trade and doesn’t matter whether you win or lose. Therefore, they might always motivate investors to trade frequently. Overall, Zerodha not giving advisory services doesn’t bother me. Moreover, they make us for these cons by providing educational initiates like Varsity.
8. How to open your trading & demat account with Zerodha?
Opening a demat and trading account with Zerodha is really fast and hassle-free. In fact, if you’ve all the documents, you can open your account and start trading within an hour.
Here are the documents required to open a demat and trading account at Zerodha: PAN CARD, Aadhar Card, 2 Passport size photos, Canceled cheque/ Saving bank account passbook. I will recommend keeping photocopies of all these documents ready before you apply for opening the accounts.
To open your trading & demat account at Zerodha, go to Zerodha website and click on ‘OPEN AN ACCOUNT’. Here is the direct link.
Note: You can find the detailed explanation on how to open your demat and trading account at Zerodha here.
9. Closing Thoughts
In the last decade, Zerodha has earned trust and respect among the trading population by providing reliable and technologically advanced trading services. It is definitely the largest discount broker in India. If you are looking to open your brokerage account with a reputable brand that offers low brokerages, and have a fast trading platform, Zerodha is definitely one of the best options.
That’s all for this post. I hope this Zerodha review is useful to you. If you have any additional queries regarding Zerodha or if you want to share your review of Zerodha, you can post it in our forum. I’ll be happy to answer your questions. Have a great day!
Hi, I am Kritesh (Tweet me here), an NSE Certified Equity Fundamental Analyst and an electrical engineer (NIT Warangal) by qualification. I have a passion for stocks and have spent my last 4+ years learning, investing and educating people about stock market investing. And so, I am delighted to share my learnings with you. #HappyInvesting