Are you also a beginner, starting new in this field? With so many different options out there for the same purpose of trading, One is obvious to get confused. But in this article, we will help you understand your needs and help you choose the perfect broker for you?
This article will answer your following questions:
1] Who is a broker? And what does he do?
2] Is it necessary for you to have a broker?
3] What are things you should keep in mind while choosing a broker?
4] Which broker is best suited for your needs?
5] Top 5 brokers for beginners to start trading with?
Selecting your broker is the first step that you need to take in this journey of the stock market. You cannot start investing or trading until you have a broker in India.
So let’s understand who is a broker and what roles he plays in your trading?
A broker is an intermediary between you (investor) and the securities exchange (BSE/NSE). A broker may be an individual or a firm. Brokers charge for the services they provide sometimes in form of commissions, and fees or are sometimes paid by exchanges. There are some subtypes in brokers as well. Such as discount brokers, are brokers who just execute trades on behalf of clients and do not provide any investment advice. Firms such as Zerodha and upstox are discount brokers and thus have a huge number of clients. Full-Service brokers are those who execute a trade on behalf of clients as well as provide investment advice. This broker may be individual and have less number of clients under them. The role of a broker in your trading is when you order a trade the trade is executed on behalf of you by your broker.
Coming to the next question, Is it necessary for you to have a broker?
The answer to this question is “YES” and the reason behind this is that securities exchanges such as the BSE/NSE only accept orders from members of the exchange. Individual brokers and firms are members of the securities exchange and thus they can execute a trade While normal investors can’t. Also, one of the most important requirements of trading- a Demat account is also provided by brokers. Thus brokers are necessary for trading.
What are things you should keep in mind while choosing a broker for you?
One of the first things you should do is, understand your own needs. Do you have the knowledge and know where to invest or do you need someone to guide you, what are the securities you would like to trade-in? After you’re clear with your needs and wants, you can start with your research and maybe while doing the research you landed here. There might be people you know, who have already been investing. You can ask them for advice, but don’t trust anyone blindly to do your research and choose the best option for you.
This article will answer your following questions:
1] Who is a broker? And what does he do?
2] Is it necessary for you to have a broker?
3] What are things you should keep in mind while choosing a broker?
4] Which broker is best suited for your needs?
5] Top 5 brokers for beginners to start trading with?
Selecting your broker is the first step that you need to take in this journey of the stock market. You cannot start investing or trading until you have a broker in India.
So let’s understand who is a broker and what roles he plays in your trading?
A broker is an intermediary between you (investor) and the securities exchange (BSE/NSE). A broker may be an individual or a firm. Brokers charge for the services they provide sometimes in form of commissions, and fees or are sometimes paid by exchanges. There are some subtypes in brokers as well. Such as discount brokers, are brokers who just execute trades on behalf of clients and do not provide any investment advice. Firms such as Zerodha and upstox are discount brokers and thus have a huge number of clients. Full-Service brokers are those who execute a trade on behalf of clients as well as provide investment advice. This broker may be individual and have less number of clients under them. The role of a broker in your trading is when you order a trade the trade is executed on behalf of you by your broker.
Coming to the next question, Is it necessary for you to have a broker?
The answer to this question is “YES” and the reason behind this is that securities exchanges such as the BSE/NSE only accept orders from members of the exchange. Individual brokers and firms are members of the securities exchange and thus they can execute a trade While normal investors can’t. Also, one of the most important requirements of trading- a Demat account is also provided by brokers. Thus brokers are necessary for trading.
What are things you should keep in mind while choosing a broker for you?
One of the first things you should do is, understand your own needs. Do you have the knowledge and know where to invest or do you need someone to guide you, what are the securities you would like to trade-in? After you’re clear with your needs and wants, you can start with your research and maybe while doing the research you landed here. There might be people you know, who have already been investing. You can ask them for advice, but don’t trust anyone blindly to do your research and choose the best option for you.
Factor to keep in mind while choosing your broker-
1. Background and reputation of the broker
The first thing to do is a background check. How old is the broker, and what do existing clients have to say about him? Are there any mismanagement cases in the past? You may find several reviews about the broker on the internet. Checking their mobile app ratings and reviews, does the app works properly, are there any glitches while trading, and what features do they provide?
Another way to check reputation is to see the number of active clients with the broker. If the broker is good and provides quality service then more people would like to join them. Here is a list of the top 10 brokerage firms with the highest active clients:
Name of the broker Number of active clients
1. Background and reputation of the broker
The first thing to do is a background check. How old is the broker, and what do existing clients have to say about him? Are there any mismanagement cases in the past? You may find several reviews about the broker on the internet. Checking their mobile app ratings and reviews, does the app works properly, are there any glitches while trading, and what features do they provide?
Another way to check reputation is to see the number of active clients with the broker. If the broker is good and provides quality service then more people would like to join them. Here is a list of the top 10 brokerage firms with the highest active clients:
Name of the broker Number of active clients
2. Brokerage and Other key charges
Stock brokers charge for their services in various forms, the most common of them is brokerage. As mentioned earlier there are two types of brokers and both charge different commissions.
Full-service brokers charge around 0.3 to 0.5 % of turnover for delivery and 0.1 to 0.3 of turnover for intraday.
Discount brokers don’t charge anything for delivery trades and charge flat 10 or 20 for all other trades.
As the brokerage of discount brokers is low, discount broking firms such as Zerodha and Upstox have a huge client base. Some of the firms also provide premium features to clients and no extra cost.
3. Customer Service
Probably this is the most important point to remember in the long run. Customer service is the most important aspect to keep in mind while looking for a service-based company. You can find plenty of user experiences on the internet about the broker. One of the easiest ways to do this is by calling their customer care helpline and asking them to help you with some problem. This would give you an idea of how customer service is.
4• Trading platforms offered
Trading platforms means the place from where you trade may be an app or a website. Taking a look at trading platforms is necessary as the actual trading would take place. You should take a look at how user friendly it is, and if there are any glitches, you can also take a look at user reviews for better understanding. Also, search if the app is available for both Android and ios. If you’re not comfortable with the platform, then it can pose an issue in future.
Stock brokers charge for their services in various forms, the most common of them is brokerage. As mentioned earlier there are two types of brokers and both charge different commissions.
Full-service brokers charge around 0.3 to 0.5 % of turnover for delivery and 0.1 to 0.3 of turnover for intraday.
Discount brokers don’t charge anything for delivery trades and charge flat 10 or 20 for all other trades.
As the brokerage of discount brokers is low, discount broking firms such as Zerodha and Upstox have a huge client base. Some of the firms also provide premium features to clients and no extra cost.
3. Customer Service
Probably this is the most important point to remember in the long run. Customer service is the most important aspect to keep in mind while looking for a service-based company. You can find plenty of user experiences on the internet about the broker. One of the easiest ways to do this is by calling their customer care helpline and asking them to help you with some problem. This would give you an idea of how customer service is.
4• Trading platforms offered
Trading platforms means the place from where you trade may be an app or a website. Taking a look at trading platforms is necessary as the actual trading would take place. You should take a look at how user friendly it is, and if there are any glitches, you can also take a look at user reviews for better understanding. Also, search if the app is available for both Android and ios. If you’re not comfortable with the platform, then it can pose an issue in future.
5. Advisory and Research facility
If you don’t have adequate investment knowledge, then this is a point to keep in mind. Many of the apps provide financial research data, weekly reports and other investment tips. Leading brokers such as Angel broking and Motilal Oswal provide advisory services.
6. Range of facilities offered
Once you have decided what kind of securities or investment you want to make. This point comes in, not all brokers are members at all Exchanges, for example, Angel One is a member at NCDEX while Upstox isn’t. Thus you wouldn’t be able to trade commodities from NCDEX on upstox. Some brokers also don’t provide options for mutual funds. So you need to keep in mind and check the facilities offered by brokers before choosing the one for you.
7. Hidden charges
Hidden charges are those which are disclosed later when you have already enrolled yourself. This can be an issue as if you knew about these charges earlier, you might have chosen some other broker. So make sure you check the pricing section in advance. Also, there are many reviews available on the internet if a broker has hidden charges or not. Remember transparency is a quality of good service company.
8• Fund transfer
When you start investing, you may add or withdraw funds regularly. So looking for a broker who provides a simple and fast fund transfer process is necessary. You also check if the broker charges any fees for Fund transfers. For example, Upstox charges ₹7 for fund transfers through net banking.
9. Tools for learning
As you’re new you would need to increase your knowledge and if your broker provides the same you would be more than happy. Zerodha has Varsity, which helps clients in gathering necessary knowledge. Also, this is not a must-be factor but is a really helpful add-on.
10. Offline branches/ local availability
Usually the more recent brokers have very less offline offices as compared to old well-established brokers. Those who are not comfortable with online methods always have an option to walk into the branch office and get their doubts cleared. Angel One has a network of over 18000+ locations across India. So this is also a point to remember.
Which broker is best suited for your needs?
As if you’re a newbie and don’t have a very high amount to invest, choosing a discount broker is a good option, but to find the right broker for you, read all the above factors and make your choice. If you’re someone with a high investment corpus and want some personal financial advice you may go to full-service brokers. Also, many of the banks provide broker service so if you have an account in such a bank you can directly contact them. Banks such as ICICI, HDFC and KOTAK provide this service.
Top 5 brokers for beginners?
➤ ZERODHA. Open Demat account
➤ ANGEL ONE. Open Demat account
➤ UPSTOX Open Demat account
➤ ICICI DIRECT. Open Demat account
➤ MOTILAL OSWAL. Open Demat account
conclusion – choosing the right stock broker is an important decision when it comes to investing in the stock market. Factors to consider when choosing a broker include the broker’s fees and charges, the availability of research and tools, the level of customer service, and the broker’s regulatory compliance. It’s also important to evaluate the broker’s trading platforms and the range of products and services they offer. It’s always advisable to check the reviews and ratings of the broker before opening an account and to compare different brokers to find the one that best meets your needs. Overall, choosing the right stock broker can make a significant difference in your investment experience and help you make informed decisions.
If you don’t have adequate investment knowledge, then this is a point to keep in mind. Many of the apps provide financial research data, weekly reports and other investment tips. Leading brokers such as Angel broking and Motilal Oswal provide advisory services.
6. Range of facilities offered
Once you have decided what kind of securities or investment you want to make. This point comes in, not all brokers are members at all Exchanges, for example, Angel One is a member at NCDEX while Upstox isn’t. Thus you wouldn’t be able to trade commodities from NCDEX on upstox. Some brokers also don’t provide options for mutual funds. So you need to keep in mind and check the facilities offered by brokers before choosing the one for you.
7. Hidden charges
Hidden charges are those which are disclosed later when you have already enrolled yourself. This can be an issue as if you knew about these charges earlier, you might have chosen some other broker. So make sure you check the pricing section in advance. Also, there are many reviews available on the internet if a broker has hidden charges or not. Remember transparency is a quality of good service company.
8• Fund transfer
When you start investing, you may add or withdraw funds regularly. So looking for a broker who provides a simple and fast fund transfer process is necessary. You also check if the broker charges any fees for Fund transfers. For example, Upstox charges ₹7 for fund transfers through net banking.
9. Tools for learning
As you’re new you would need to increase your knowledge and if your broker provides the same you would be more than happy. Zerodha has Varsity, which helps clients in gathering necessary knowledge. Also, this is not a must-be factor but is a really helpful add-on.
10. Offline branches/ local availability
Usually the more recent brokers have very less offline offices as compared to old well-established brokers. Those who are not comfortable with online methods always have an option to walk into the branch office and get their doubts cleared. Angel One has a network of over 18000+ locations across India. So this is also a point to remember.
Which broker is best suited for your needs?
As if you’re a newbie and don’t have a very high amount to invest, choosing a discount broker is a good option, but to find the right broker for you, read all the above factors and make your choice. If you’re someone with a high investment corpus and want some personal financial advice you may go to full-service brokers. Also, many of the banks provide broker service so if you have an account in such a bank you can directly contact them. Banks such as ICICI, HDFC and KOTAK provide this service.
Top 5 brokers for beginners?
➤ ZERODHA. Open Demat account
➤ ANGEL ONE. Open Demat account
➤ UPSTOX Open Demat account
➤ ICICI DIRECT. Open Demat account
➤ MOTILAL OSWAL. Open Demat account
conclusion – choosing the right stock broker is an important decision when it comes to investing in the stock market. Factors to consider when choosing a broker include the broker’s fees and charges, the availability of research and tools, the level of customer service, and the broker’s regulatory compliance. It’s also important to evaluate the broker’s trading platforms and the range of products and services they offer. It’s always advisable to check the reviews and ratings of the broker before opening an account and to compare different brokers to find the one that best meets your needs. Overall, choosing the right stock broker can make a significant difference in your investment experience and help you make informed decisions.