Online Trading and Demat
InvestmentsOnline trading in India requires a demat account (electronic securities storage) and a trading account (for placing buy/sell orders). Both are provided by brokers. Discount brokers (Zerodha, Groww, Upstox) charge significantly less than full-service brokers.
In detail
Demat account: holds your securities in electronic form. Two depositories: CDSL and NSDL (you only need one, your broker links you).nTrading account: placing orders on NSE/BSE.nBroker types:nFull-service (ICICI Direct, HDFC Securities): higher brokerage, advisory services, relationship managernDiscount (Zerodha, Groww, Upstox, Angel One): flat fee (Rs 0-20/trade), no advisory, self-servicennBrokerage comparison:nFull-service: 0.5% of trade value both ways (Rs 1,000 for Rs 1L trade)nDiscount: Rs 0 for delivery trades, Rs 20 flat for intraday (most platforms)nnFor long-term equity investors: discount brokers are almost always sufficient.
Real-life example
Priya opens Zerodha account for equity investing. Demat annual charges: Rs 300. Trading in delivery equity: Rs 0 brokerage. She buys Rs 5L TCS shares: zero brokerage. Holds 2 years. Sells: zero brokerage. Total broker cost for Rs 5L investment held 2 years: Rs 600 (2 years demat charges). Her colleague at ICICI Direct paid Rs 5L x 0.5% x 2 (buy+sell) = Rs 5,000 brokerage + Rs 1,200 demat = Rs 6,200. Priya saved Rs 5,600 by choosing a discount broker.