Lowest Brokerage Charges In India For Demat Account
What is brokerage?
Brokerage is a fee levied by brokers for managing investment transactions in your demat and trading account and rendering related services. Brokerage charges vary across different brokers. SEBI has set norms for the maximum brokerage a broker can charge. It is limited to 0.25% for intraday trades and 2.5% for equity delivery of the entire trade amount.
There are two ways in which brokerage is calculated. One is where you will be charged a flat fee on every trade, irrespective of your traded value. The other is where you will be charged a percentage of the total traded value. A percentage-based charge is more suitable for smaller trades.
There are online calculators on different brokerage platforms that make the calculations quite simple. An online brokerage calculator displays the brokerage fee and other charges levied on your transaction.
Some of the additional charges include:
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Transaction fee This fee is charged on the total transaction value and varies across segments and exchanges. For equity delivery, equity intraday, equity futures, index futures and currency futures segments, the transaction fee is applied on the traded value. For equity options, index options and currency options trading segments, this fee is applied on the premium value.
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Stamp duty Stamp duty is levied as per the state government on the buy side. It is different for different segments and varies from state to state.
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Securities transaction tax (STT) This is charged every time you buy and sell securities on the exchanges. It is levied on both sides for Equity Delivery. For Equity Intraday, Futures and Options, it is levied on the sell side.
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Goods and Services Tax (GST) The Goods and Services Tax (GST) is levied on brokerage, transaction charges and SEBI fees at 18%.
Conclusion
The brokerage fees today are considerably lower than they used to be in the past. It is cheaper to be an investor today with brokerage sometimes being zero for intraday trades with some brokers. So, if you are a budding investor, it makes sense to do your bit of research and find a suitable broker with lowest brokerage charge for trading.
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FAQs on Lowest Brokerage Charges For Trading
What is the maximum brokerage a broker can charge?
The Securities and Exchange Board of India (SEBI) has established norms regarding the highest amount of brokerage that a broker may charge. Hence, a broker cannot levy brokerage fees for intraday trades of more than 0.25% and equity delivery of more than 2.5% of the entire trade amount.
The lowest percentage-based brokerage fee is 0.01%. The fee charged by brokers may vary and depend on different factors such as the type of trade or the value of the transaction.
What are the brokerage charges for intraday?
The brokerage charges for intraday trading would vary with different brokers. A broker may levy a fixed cost per trade or charge a percentage on each trade. The range of percentage-based brokerage fees is 0.01% to 0.05% of the entire value involved in a transaction. However, flat costs for each trade vary from ?10 to ?20.
What are the brokerage charges for options?
Percentage-based brokerage fees for trading options can vary from 0.1% to 0.05% of the total contract value. For example, if the investor has bought a contract value of ?2,00,000, and the brokerage charge is 0.05%, the investor will have to pay the broker ?100. For every trade, the brokerage charges might range from ?10 to ?100 if they are based on a flat price. But just as with any other sort of trading, the brokerage charge may vary depending on the type of trading account an investor manages and the volume of trades they make.
What are the brokerage charges for delivery?
Delivery brokerage costs include both fixed fees for each trade and fees based on a percentage. The percentage fees might be anything from 0.10% and 0.50% of the total amount of the transaction. For delivery, the lowest brokerage fees are 0.10%. As a result, if an investor buys shares for ?2,00,000, the brokerage charge is 0.30%, and the investor needs to pay ?600 for the transaction. However, the flat cost varies from ?10 to ?25 for each trade. Before you trade, take into account the broker’s fee structure.
What are the brokerage charges for futures?
The broker and his fee structure determine the intraday brokerage costs. Brokerage fees for futures are often assessed as a percentage-based fee or as a fixed cost per trade. When it comes to percentage-based fees, the range of possible costs is 0.01% to 0.05% of the overall contract value. 0.01% is the lowest brokerage fee. In contrast, brokers that offer flat-fee brokerage charge a fixed cost for each trade that can range from ?10 to ?100. It's also important to remember that brokerage fees might differ with brokers depending on the type of trading account and volume.
