Before entering into the world of trading and investment, the first thing that pop-ups people's head is How to choose the best broker? There are many online discount brokers and full-service brokers in the Indian brokerage space, which makes it challenging to find out the best stockbroker. The best brokerage firm may have a different meaning from person to person based on their varied trading and investing requirements. The article discusses the key factors that every person must watch out for on how to choose the best broker in India to open Demat & trading account.
How to choose the Best Broker? Key Factors to consider
Before opening a trading & demat account with any broker, you must do prior independent research about stockbrokers to choose the top brokerage firm. There are many brokers; discount brokers (Zerodha, Upstox, Groww, etc.) and full-service brokers (ICICI, HDFC Securities, Angel One, etc.) who serve customers differently, but which broker is the best for you? depends on your trading & investing needs.
Brokerage charge is the topmost factor to consider along with other factors such as services offered by brokers, account-opening charges, trading platforms (app or website), hidden charges, etc. If you’re a beginner and looking to open a trading account, then here is the list of crucial factors you must check before choosing the best brokerage firm in India.
1. Brokerage Charges
A brokerage fee is the most crucial factor that must be watched out for to select the right broker. It is the fee or commission charged by a broker on the trading services offered in equity, derivative, commodity, and currency segments. On the brokerage front, brokers can be of two types;
- Discount brokers: Flat Brokerage Pricing Model per executed order.
- Full-service brokers: Traditional or Percent-based brokerage plan.
Discount brokers provide Flat fixed brokerage online trading services, whereas full-service brokers offer trading tips, calls, & research facilities and charge percentage-based brokerage fees from customers.
If you want to start trading in stocks and derivatives yourself, you can choose online discount brokers who charge minimum brokerage. It will help traders to save a lot of trading costs. Zerodha is India’s best discount broker who offers free delivery trading (investment in stocks) and charges Rs. 20 per order maximum brokerage on intraday and F&O trades. However, Prostocks is the best brokerage house for intraday traders to start free intraday trading under the Unlimited Trading Plan. Unlike it, if you’re a first-time trader and want to access stock market research & advisory, trading calls, and other personalized facilities then, it is better to go with full-service brokers.
Besides brokerage, transaction charges, Demat charges, STT, GST, etc. are also part of your trading costs, but these remain the same across all brokers.
2. Trading Platforms
In today's time, the mobile trading app is the most popular trading platform to trade on the go anytime. You must first investigate whether your broker offers a mobile app for online trading or not and also check its compatibility on android and iOS. You must check the app functionality, user interface, speed, features offered, market scanner, market depth, real-time market analytics, charting features, types of charts, technical indicators, etc. At the same time, don’t forget to check whether a broker charges any platform fee or is available for Free.
If you are an intraday trader or expert, you may need advanced features like Trade from the chart, advanced charting, etc. In such a scenario, go with a broker who offers desktop trading software.
3. Research & Advisory Services
Research & advisory facility is one of the critical factors for newbies who are not looking to trade or invest themselves. Most of the leading full-service brokers such as Motilal Oswal, ICICI Direct, HDFC Securities, Sharekhan, and Angel One offer stock research reports, trading calls & tips, and research & advisory facilities to customers. Also, consider the types of research reports available such as market reports, economic reports, stock-specific research reports, IPO research, etc.
You aren't just supposed to check the broker offering research & advisory services but also measure the research reliability to select the best share brokerage firm for stock trading.
4. Products & Services Offerings
Not all brokers provide diversified trading and investing products to customers; equity, derivatives, commodity, and currency. If you want to invest in different products, then keep a check on whether your broker provides multiple exchange trading (BSE, NSE, and MCX) or not. However, if you are only interested in equity trading, look for a broker who offers online stocks trading.
Apart from this, if you want to invest in products like mutual funds, and bonds, then find the broker that provides all such offerings. Many leading discount brokerage firms like Zerodha, and Upstox have all the offerings in their product portfolio. However, Groww and Paytm Money only offers online trading in stocks and equity derivatives along with direct mutual funds.
If you want to invest in wealth management products like PMS (Portfolio Management Services), then you may go with full-service brokers.
5. Customer Service
Customer service is a significant factor while selecting the best stock brokerage company in India. These days, brokers provide an easy and hassle-free investing process through online trading platforms, but you may need customer services many times for different reasons. It may be required in different areas; how to open an account with a broker? How to trade, account balance inquiry, etc.
There are various channels to offer customer services such as telephonic services on customer care helpline numbers, online help & support via ticket, chatbot, or branch support. Online discount brokers provide online customer support and have no branches. However, full-service brokers have a dedicated relationship manager or customer support team at their branches. Thus, both online and offline support will be available at full-service brokers.
Select a broker that delivers excellent customer service through the best channel. You can check customer service ratings and avoid brokers where customer queries are not resolved instantly. You can also check the broker who offers personalized or one-to-one services. If you're new to trading & investing, then you may find a broker who offers the stock market learning & education platform. Zerodha Varsity, Upstox Learning Centre, Groww Academy, and 5paisa School are the top free stock market learning platforms.
How to choose the Best Stock Broker in India? Step-by-step process explained
Here are the key steps explained on how you can select the top stock broker that matches your requirements as follows;
1. Check Brokers reputation and shortlist
Before choosing any broker, check how far it is servicing customers in the Indian brokerage space. You must read brokers' reviews, ratings, and check complaints filled. Brokers that have a proven track record and less compliant to customer ratio can be chosen as the best share broker in India. You should keep a check on the broker's customer base and year-on-year growth in it to know the biggest stock brokers in terms of no. of clients. Shortlist a few brokers based on their reviews and reputation.
2. Brokerage charges comparison
Now, compare the brokerage charges of all the shortlisted brokers to select the one which charges competitive trading costs. It is to state that the lowest brokerage charge is not the only basis to choose the top stockbroker.Therefore, you must create a list of brokers that brokerage charges are minimal and competitive.
3. Match your trading needs and preferences
Now, check whether your broker offers products as per your trading & investing requirements or not. For instance, if you want to trade in commodities, then select a broker that is a registered MCX member and provide MCX trading. However, equity traders may search for brokers offering online trading shares and equity derivatives.
4. Trading Platforms
Compare the choice of trading platforms (trading website, mobile trading app, and desktop trading terminal) offered by different brokers. Once compared, finalize the broker with the best trading platform that matches your preferences.
5. Select the best broker
Upon a successful comparison of many brokers, select the best broker in India that perfectly matches your needs and preferences. Once selected, open Demat & trading (2 in 1 account) with the broker and start online trading. Notably, once a finalized broker is not the share broker for the entire life, you can switch your broker anytime later whenever required.
How to choose Best Broker in India – Final Verdict
Before opening an account with any broker, prior independent research about the broker's products, facilities offered, trading platforms, and its features, brokerage charges is a must. You can read online brokers' reviews, check their mobile app ratings on the app store and play store, check its customer base, and compliant management. The best share brokerage firm in India is the one that meets all your trading and investing requirements and delivers excellent customer support.
