What is the best app for buying or trading stocks?

Pick a discount broker you're comfortable with, as per your investment style and functionality requirements

Intro 💫

In India, there are plenty of small and big brokerage platforms available to you, that let you open trading and demat accounts for equity, bonds, ETFs (Exchange Traded Fund), commodities etc.

Read this to get an overview of features / functionality of popular brokerage services, and the costs you'd be incurring if you were to go with one of these.

Broadly speaking, there are two types of brokerage services in India at present:

  • Discount Broker

  • Full Service Broker

Full service broker 🏦

These are the traditional stock brokers, most commonly sharing a parent corporation with a big bank, which offer more than just buy / sell / hold functionalities. To name a few add-on services, for instance, most full service brokers provide:

  • Brokerage reports and analysis

  • Stock advisory

  • Portfolio management / wealth management services etc.

Typically, these platforms have both online and offline presence to serve you.

Axis Direct, Citibank Securities, HDFC Securities, ICICI Direct, Kotak Securities, Motilal Oswal Financial services, SBI Securities etc. are examples of full service brokers.

A tell-tale sign of a full service broker, is that they charge a percentage of your investment as brokerage fee, which means costs scale with investment amount.

Discount Broker 💻

After the penetration of internet, it became less and less necessary to have a physical location to cater to the customers' needs.

So with reduced staff by not having physical customer service locations, discount brokers are offering the trade with discounted rate.

They also don't provide the research / advisory services, portfolio or wealth management services etc. to keep the operational costs low.

As a result, they can afford to charge lower trading fees. Most discount brokers have zero fee on equity delivery trades, and close-to fixed fee for intraday trading / BTST etc.

One also needs to keep in mind economics at scale. By offering lower costs, these services are reducing barrier to entry. That means larger number of users, and higher trade volumes. Even if per trade costs are lower, it has the potential to help these discount brokers pocket higher revenue than some of the full service brokers.

Such businesses want the volume, and while they operate on lower revenue margins per trade (not to confuse with margin provided by a broker) compared to a full service brokerage; they make bank on volume.

A few popular ones are listed below, in alphabetical order.

Comparison of Discount Service Brokers

The following table is a comparison-at-a-glance for these discount brokers. The information presented in this table maybe out of date at any moment in time. We'll do our best to update this table whenever we come across new information.

5PaisaGrowwPayTm MoneyUpstoxZerodha

Good For

Various trading plan from basic to intra trader pack to cater different customer segments & charges

Single platform for Stocks, direct mutual fund and other asset class investments

Lowest trading charges

Fastest trading platform (15 Seconds)

Technical Analysis & Integration with ‘Quant’- for behaviour analysis & fundamental analysis

Bad For

User interface is difficult to navigate especially for beginners

No option to currently trade in derivatives (futures & options), commodity, and currency segment.

No NRI Trading

No Good Till Triggered (GTT) or Good Till Cancel (GTC) orders

Frequent delays and downtime during high traffic hours

IPO application Possible?

Yes

Yes

Yes

Yes

Yes

Invest in US market

Yes

Yes

No

Yes

No

Add-on Pack available?*

Yes

No

No

Yes

No

Demat Annual Charges

300 Rs.

Free

300 Rs.

300 Rs.

300 Rs.

Equity Delivery Charges

20 Rs./Order

Rs. 20 or 0.05%/Order (whichever is lower)

Free

Free

Free

Equity Intraday Charges

20 Rs./Order

Rs. 20 or 0.05%/Order (whichever is lower)

Rs. 10 or 0.05%/Order (whichever is lower)

Rs. 20 or 0.05%/Order (whichever is lower)

Rs. 20 or 0.03%/Order (whichever is lower)

Equity Futures

20 Rs./Order

NA

Rs. 10/Order

Rs. 20 or 0.05%/Order (whichever is lower)

Rs. 20 or 0.03%/Order (whichever is lower)

Equity Options

20 Rs./Order

NA

Rs. 10/Order

Rs. 20 / Order

Rs. 20 or 0.03%/Order (whichever is lower)

Fund Transfer Options

-

-

-

-

-

UPI Transfer Time / Fees

NA

Immediate / Free

Immediate / Free

Immediate / Free

Immediate / Free

Instant Payment Gateway Time / Charges

NA

Immediate via Net banking / Free

Immediate via Net banking & Debit Card / Free

22 banks / 7Rs+tax

25 banks / 9Rs+tax

NEFT / RTGS Time / Fees

2-10Hrs / Free

NA

NA

2-10 Hours / Free

2-10 Hours / Free

IMPS Time / Feed

10 Min. / Free

NA

NA

NA

10 Min. / Free

Cheque Time / Fees

NA

NA

NA

3-5 Days (250Rs+tax- For dishonored margin cheque)

3-5 Days / 350Rs+tax

Number of accounts

0.25 Million

1 Million

6 million

2 million

4 million

User Experience (UX) and User Interface (UI)

Imposes outdated password length restrictions, doesn't have proper 2FA on their website

*Add-on pack: Some platforms offer subscriptions plans which will enable to advanced users to get more features, reports, reduced trade fee etc. for a monthly fee.

*Number of accounts: It's indicative of trust, as larger user-base might mean more audits & compliance requirements. These numbers change everyday, so exact value is not that important. By the time you're reading it, most likely exact number of accounts on each of these platforms could be higher than what you see in the table above.

The above table compares some popular discount service brokers, in terms of the following parameters:

  • What are the aspects the platform make easy for you (USP)

  • What are the factors the platform make harder / costlier for you

  • Fees / charges on various types of trades

  • Funds credit options to trading account, and time it takes to credit the amount

  • Approximate number of accounts on the platform, as reported, at the time of writing this

Wrapping Up 🎁

Selecting a brokerage service might require some care. Unlike picking a mutual fund app, it's not that easy to migrate between brokers. This is not an easily reversible decision.

Some brokerages make it so easy to trade, that you might end up placing too many orders, and lose big on brokerage fees.

Most brokers ideally provide a cost calculator to get an estimate of various fees & charges that might show up against your account, for the volume of trades you'd want to execute.

We highly recommend being careful with F&O, intraday trading and BTST trades. Ideally, as a retail investor, if you're looking to buy for long term, most discount brokers are quite cost effective.

An important aspect to understand, is your broker has lot of control over your holdings; unlike your mutual fund app.

For instance, the Karvy brokerage scandal of 2019-20, exposed how even full service brokers can exploit dormant holdings, keeping those shares as collateral for their other business arms to get loans.

It's of paramount importance that you evaluate a brokerage service on these two parameters:

  • Does the brokerage house have a history of lending out shares, to arrange for some liquidity?

  • Does the brokerage platform have enough retail accounts, that they'd be subject to more audits and compliance?

This is why it's important to go with a broker that has been around for past few years, have healthy financials of their own, and have good volume. On that front, Zerodha comes out ahead of other brokers covered above.

It doesn't just end at choosing a broker with decent fees and nice UI / UX. You've to keep track of your holdings outside of the brokerage app. Check your monthly CDSL or NSDL CAS, to confirm your holdings are as shown in the portfolio section of your broker's app.

As per SEBI stipulation of BSDA (Basic Service Demat Account), there will not be any annual maintenance charges if your portfolio value is less than ₹50,000. However, if it is greater than ₹50,000 but less than ₹2,00,000, a charge of ₹100 will be levied. If the portfolio value exceeds ₹2,00,000, charges will be levied as applicable to a regular non-BSDA demat account.

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