It gets pretty difficult to choose an online trading parter with availability of so many options now.
It was difficult time for me as well when I first thought of opening a trading account coz if you are a first timer then probably all the options look same(at least for me it was that way ?). Well to start off I tried to get info, but it was all scattered and had to work around a lot to get the things in place. That made to write this which might be helpful for someone like me. ?
I haven’t considered all the available options but some that I found to be significant.
Quick Info *
There are two types of options available for online trading.
Browser Based*
It runs on an Internet browser, similar to browsing any site. Virtually allows you to access your account from any place. Only major drawback I find with this feature is refresh problem. You need to refresh the site manually to get the current info. This might prove fatal when transacting over a volatile script.
Software Based*
Trader with whom you are tied with shall be giving software and you can do the trading through that instead of using the browser. It is pretty fast compared to earlier option and avoids data refreshing hassle also it comes with lots of useful handy tools. But this has its own drawback, it requires you to download and install the software on your machine so unlike browser based option you can’t get mobile with this. Also the software doesn’t work on LAN or if you have any firewall installed(which shall be an likely situation if you are accessing from office)
Ok! Now we can get started with the actual comparison.
Initial Account opening cost*
Usually most of them charge as a one time cost. There is no annual charge as they get the benefit from brokerage. But this varies from each service provider.
For e.g.
ICICIDirect charges Rs 750.
India Infoline charges Rs 425
Motilal Oswal - Rs 1500 / Rs 500(Depending on what option you take software / browser based, necessarily in that order.)
Software/Browser*
ICICIDirect offers only an browser based option. While 5 Paisa, Motilal Oswal, India bulls and InvestSmart offer software based or both.
Brokerage*
It varies with being as either a fixed amount or in percentages.
ICICI Direct - 0.75% per transaction
India Infoline - 0.5% per transaction.
Sharekhan charges 50 paise per Rs 100
Motilal Oswal charges 40 paise per Rs 100.
When you compare the brokerage charges of different firms, always do so in percentage terms.
Let’s say your transaction was worth Rs 100. ICICI Direct will charge you 0.75%, India Infoline 0.50%, Sharekhan 0.50% and Motilal Oswal 0.40%.
Also, check if the Service Tax and Securities Transaction Tax are passed on to you or if the broker picks up a portion of the tax. A Service Tax of 10.2% is levied on the brokerage while a Securities Transaction Tax of 0.1% is levied on the total trade value. This brokerage is for delivery based trades(When you buy with idea of holding the script and not selling it off on the same day) and decreases for intra-day trades.
Sharekhan lowers its brokerage charges to 10 paise per Rs 100 of transactions for intra-day trades. Motilal Oswal charges 15 paise per Rs 100 for intra-day trades. India Infoline charges 0.10% for such trades. ICICI Direct keeps the rate constant but lowers the STT to 0.02% for intra-day trades.
Depository fee*
To maintain your demat account, you will have to pay an annual fee.
ICICI Direct charges Rs 450, India Infoline charges Rs 250, Sharekhan charges nothing for the first year, but Rs 500 for every year later on.