An Unveiling of Stock Brokers: A Beginner’s Guide to Trading
Would you want to know who stock brokers are?
These brokers deal in stocks, as the name implies (along with commodities, currencies, equities etc.). Thus, stock brokers act as intermediaries at the exchange, buying and selling shares on behalf of investors. They provide investors access to trading platforms so they may carry out and monitor trades. To put it simply, stock brokers are necessary in order to create a demat account. Furthermore, you are unable to trade or invest without a demat account. Thus, stock brokers are crucial to getting started in trading.
What is the role of a stock broker?
When you hear the word “broker,” you probably imagine an intermediary or an agent who arranges a meeting between two parties in order to close a deal. Similarly, a stock broker acts as a mediator for investors (or traders) and listed corporations. Your demat account can only be formed through a stock broker; in other words, you must register with a broker in order to open a demat account. You can trade and invest on a platform that the broker offers. At the exchanges, your broker is permitted to purchase and sell stocks on your behalf.
In simple terms, you would receive services from a stock broker in return for a commission, annual fee, or brokerage.
Are stock brokers trustworthy?
Based on their evaluations and reputation, the brokers that are featured here have been carefully selected. Therefore, you can definitely trust the ones you view and compare on our website. In addition, stock brokers in India are registered with a depository (either NSDL or CDSL), and SEBI keeps a close eye on their operations. Thus, in general, the brokers are reliable; however, before making an investment with them, it is always advisable to read the broker reviews.
An alternative perspective is that you should never choose a broker without first doing extensive investigation; in other words, you should never blindly trust a broker. As a result, Select will greatly simplify your task by helping you compare the brokers according to a number of factors. Additionally, the broker you ultimately decide on will almost certainly be the most reliable one you can find.
Is it safe to keep my money in a brokerage account?
Under normal conditions, the money is safe. However, if the broker collapses unexpectedly and you have contributed further balance/monies to your broker’s wallet or account, you may lose these funds. These cash may be retrieved later, although that is an uncommon occurrence. So, rather of leaving excess cash with your broker and forgetting about them, you should avoid doing so and remain vigilant. SEBI is also there to monitor the brokerage firm’s operations and warn you if it detects anything questionable, but being vigilant on your own always helps.
| Broker | Account Opening Charge | Account Maintenance Charge | Equity Delivery Brokerage | Equity Intraday Brokerage |
| Groww | Free | Free | 0.05% | 0.05% |
| Zerodha | ₹ 300 | ₹ 300 | Zero | 0.03% |
| Angel One | Free | ₹ 240 | Zero | 0.03% |
| Upstox | Free | Free | 2.50% | 0.05% |
| ICICI Direct | Free | ₹ 700 | 0.18% | 0.018% |
| HDFC Securities | Free | Free | 0.15% | 0.015% |
| Kotak Securities | Free | ₹ 600 | Zero | Zero |
| Motilal Oswal | Free | ₹ 199 | 0.20% | 0.02% |
Account Opening Fee: The amount a stockbroker charges to initiate a new trading account. The expenses related to opening your account and providing you with access to the broker’s platform can be covered by this charge.
Account Maintenance Charge: The annual or periodic fee charged by a stockbroker to maintain your trading account. This charge might take care of the expenses related to maintaining the status of your account and giving you regular services like account statements and customer service.
Equity Delivery Brokerage: The cost incurred by a stockbroker when purchasing or disposing of stocks that are delivered to your demat account. The shares you purchase with delivery become your property and are put into your demat account. After then, you have the option to sell the stock at a later date, keep onto it for the long run, or get dividends if the firm pays them.
Equity Intraday Brokerage: The fee that a stockbroker charges for purchasing and selling stocks during the same trading day (i.e., the stocks are not delivered and are squared off at the end of the day) is known as equity intraday brokerage. Day trading is another name for equity intraday trading. The goal of buying an intraday stock is to take advantage of price changes that occur during the trading day. The stock is not put into your demat account, and you do not become the owner of it.
Here is a brief rundown on selecting a broker:
Discount brokers like Groww or Zerodha may be a fantastic option for you if you’re a beginner searching for an affordable platform for occasional trading because they provide minimal equity delivery brokerage costs and free account creation and maintenance.
Though they have somewhat higher brokerage costs, full-service brokerage firms like HDFC Securities or ICICI Direct can be a better choice if you are an active investor in need of more research and direction. They are able to provide you greater support along with personalized guidance.
Source credits: https://select.finology.in/