Equity and Commodity market plays a vital role in Indian economics. A large section of Indian is engaged in trading. Therefore, brokers are in high demand always. The main objective of trading is to get to maximize profit. Hence, one should be careful about choosing a broker. There are certain criteria for choosing a broker, such as services and feature offered, research and investment tools, minimum opening balance requirement, cost of commission and fees. In India, brokers are registered under SEBI. Generally, you will find two categories of brokers, such as full-service broker and discount broker. The article will cover the distinction of Discount Broker vs Full-Service Broker in India.
Discount Broker vs Full-Service Broker-Key Differences
There are some key differences on Discount Broker vs Full-Service Broker.
Brokerage
Their charge is based on each executed trade in percentage while low-cost broker offers a flat fee on each trade executed.
Brokerage rate
Generally between 0.3% to 0.5% and in low-cost rates is Rs.20 per trade.
Investors quality
Investors those who want advisory for their investment should go for full-time and those who can research on their own or have a financial advisor can go for a low-cost broker.
Primary service
Along with the trading platform, the full-time broker provides advisory for investment but in the low-cost brokerage firm, the advisory is not available here.
Research and analytical department
Full-time brokers have their own research and analytical department while in low-cost brokerage, there is no such facility.
Customer services
Face to face customer services is available while low-cost brokerage only has online facilities.
Example
Sharekhan, Motilal Oswal, ICICI Direct, HDFC sec, etc are the examples of full-time brokerage firm while Zerodha, Pro stocks, RKSV, 5Paisa, etc are low-cost brokerage firm.
Now, let’s focus on the low-brokerage firm.
Pros and Cons of using Discount Broker in India Firm
Advantage:
- Lower fees or brokerage charges for trading.
- Investors have more control and flexibility in their trading and Demat accounts.
- Brokerage bias section is nil here.
- Traders have enough access to online tools.
- Monitoring opportunity is available.
Disadvantage:
- No advisor available in here.
- As it is only online-based, traders sometimes face problems.
- They don’t have their own research team.
This is a brief overview of the low brokerage firm. It up to you whether you choose low-brokerage firms or not.
