How can I trade with zero brokerage?
Every industry works on a quid pro quo model. Therefore, for every product and service that you purchase, there is a consideration for the seller, which is commonly referred to as price. A trading account is no exception to this rule. When you use your trading account to buy and sell securities in the stock market, your stockbroker charges a certain fee called brokerage. This amount is the consideration for the trading platform and services provided by the broker. If you are wondering 'how can I trade with zero brokerage', the answer is opening a zero brokerage Demat and trading account.
What is a zero brokerage trading account?
As the name suggests, a zero brokerage trading account is a trading account where brokerage is not charged on your trades. This is in stark contrast to a traditional trading account, where the broker charges a percentage of the total trade value as brokerage. So, if you make two trades of Rs. 50,000 each and assuming your broker charges 0.5%, the total brokerage fee for the two trades will be ₹500 (5% of ₹1,00,000).
On the contrary, in a zero brokerage trading account, you are not required to pay any brokerage. Now whether all brokerage charges are eliminated or only the brokerage on equity delivery transactions is eliminated, depends on the type of brokerage account you own. For instance, if you open a demat account with m.Stock by Mirae Asset, all your trades are free on-equity delivery, mutual funds and IPOs.
How does a broker make money if they offer zero brokerage?
On the surface, it may appear that a zero brokerage account leads to a significant loss of income for the broker. However, that’s not the case. Offering a zero brokerage account to traders and investors can actually lead to a drastic increase in the overall business volumes and, in turn, commission received by stock brokers. They also earn by facilitating trading in other assets such as bonds, mutual funds, sovereign gold bonds etc.
What are the benefits of a zero brokerage trading account?
By opting for a zero-brokerage trading account , investors can enjoy the benefits such as:
Lower outflow of money by way of brokerage charges
Increased incentive to trade
Safe and convenient portal for trading
Access to market reports and analytics
Ability to view and manage your investment portfolio from one account
No pressure from relationship managers to indulge in a certain number if trades
To conclude, opening a trading account is an excellent way to save on brokerage fees and make the most of your stock market investments. You enjoy a seamless trading experience on equity delivery transactions. One of the most prominent trading accounts in India is m.Stock which allows you to trade for free across equity delivery, mutual funds and IPOs. So, save thousands in brokerage by shifting to m.Stock demat account today!
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