Chapter 1.15: How to get the Lowest brokerage charges in India
Dinesh opened a demat account some years ago. He wanted to make the most of equity returns by investing directly in shares.
A large number of investors have been treading on the same path as Dinesh. Around 3.75 million demat accounts were operational in India in the financial year ending 31 March 2018, says an Economic Times report. This exceeds the previous record of three million in 2007–08.
But when investing directly in shares, you must shop around for the best demat account. Specifically, it helps to shortlist accounts that have the lowest brokerage charges. You could look for brokerages that offer discounts as well.
Composition of brokerage charge
Your demat account brokerage charge consist of a number of different fees. These are:
- Actual brokerage charges
- Account opening charges
- Annual maintenance charges
- Fund transfer charges
- Research and other service charges
- Other hidden charges
How brokerage is calculated
It is important that you get an idea of the brokerage charges before starting to invest in stocks. The online calculators on different brokerage platforms make the calculations quite simple. An online brokerage calculator displays the brokerage fee as well as other charges levied on your transaction. Some of them are:
- Transaction charges
- Stamp duty
- Securities transaction tax (STT)
- Goods and Services Tax (GST)
You could use different calculators depending on what you plan to invest in. For instance, there are separate brokerage calculators for commodities, currency futures, currency options, equity delivery, equity futures, intraday equity, and equity options.
To calculate your brokerage charges, you will have to provide some key information, such as:
- Buy price
- Sell price
- Number of shares you wish to buy
- The state you are from
Once you have inserted these details, hit on the ‘calculate’ button to view the brokerage charges.
Say, you are a stock trader living in West Bengal. You buy two shares worth Rs 20,000 and sell them off at Rs 30,000. You will get the following results:
- Total turnover: Rs 1 lakh
- Brokerage: Rs 49
- STT: Rs 12.63
- SEBI turnover fees: Re 0.15
- Stamp duty: Rs 2
- Transaction charges: Rs 3.25
- GST: Rs 9.41
Therefore, your total brokerage and tax dues amount to Rs.76.44. The transaction in this case leads to a total profit of Rs 19,923.57.
Free intraday trading through Kotak Securities
On some days, you might buy a set of shares and sell them off within a few hours that very day. This is known as intraday trading. To optimise your intraday trades, you may need to lower your overall costs. The free intraday trading facility by Kotak Securities can come in handy here. You can find out for
yourself by opening a trading account with Kotak Securities. To subscribe for Free Intraday Trading (FIT), simply pay a nominal amount of Rs 999 per year. This works out to less than Rs 4 per day.
Kotak Securities’ FIT option ensures a cost-effective trading experience. Take a closer look at what is on offer:
- There is no brokerage fee to pay—no matter what your trade size, platform, or market segments are.
- Are you an existing client? If so, contact the customer care to sign up for FIT.
- An award-winning research team is always at work, preparing equity and derivative reports. You can view these once you subscribe to the FIT facility.
- Once you download the Kotak Stock Trader app on your phone, you can view your profile even without logging in.
- Improve your intraday trades with the help of position trackers, portfolio analytics, and watch lists. Simply download KEAT Pro X onto your computer. Or test out the Trade Smart Terminal for a similar trading experience.
- Only clients who trade directly on the Kotak Security platform can opt for FIT. The facility is not available to clients who trade through dealers.
- Clients must pay delivery brokerage as per the agreement.
- Only Indian residents with an online account can avail FIT at the moment.
- Based on the agreement with Kotak Securities, customers will have to provide margins.
- Customers will need to pay a nominal brokerage of one paisa per scrip as well as other applicable fees.
- You cannot opt for FIT in the case of currency and commodity trades.
- In case you do not sell the shares within the same day as you bought them, the trade becomes a delivery trade. Since it is not an intraday trade, FIT does not apply in this case and you will have to pay the applicable charges.
Just keep in mind the terms and conditions:
Conclusion
Costs play a vital role in the world of intraday trading. Even small savings can make a difference in your overall turnover. That is why choosing the right brokerage platform is essential.
Open a Free Intraday Trading account here
- Linked savings and trading accounts
- Secure fund transfers
- Seamless trading
