Earlier, brokerage firms and their agents were seen as the only option for users to invest money in the stock market. Not only did they offer you the only channel to invest, but they also had access to data on stocks performances to help make smart decisions on investing. This data was not available to the common man, until now.
With the introduction of Zerodha and other investment apps, the process described above has become simpler, without having to pay heavy brokerage commissions to middlemen. Investment apps also provide users with tailored portfolios, options to invest in stocks of your choosing, check your investment performances, and receive detailed insights, all without any human intervention.
Founded in 2010, Zerodha is the largest stockbroker in the country. In this article, we take a look at the Zerodha platforms (ZerodhaDemat, Zerodha Kite, Zerodha Coin, and other products), one of the most popular names in the investment platform industry. Zerodha is registered with BSE, NSE and MCX, and MCX-SX, and allows its customers to trade in:
- Mutual Funds
- Futures and Options
- Government Securities
- Sovereign Gold Bond
Zerodha is a popular brokerage firm in the country, known for its discounted brokerage fees and multiple services. To trade through the platform, a user needs to create a Demat account with the firm.
Setting up your Demat account
Whichever Zerodha platform you are on (explained later in this article), Zerodha will take you to its account creation page. You can also go to the account creation page using the direct link here. On the page, you will be asked to enter and verify your mobile number using a One Time Password (OTP).
After this, you will have to enter your basic information (Name, DOB, email address) and your PAN. After validating the information, you will have to pay the account opening fee (described below). Once this is done, you will need to upload all documents, including bank statements, Aadhar card, and PAN card.
After this, you will undergo an In-Person Verification (IPV) over phone or webcam. For this step, they’ll show an OTP on the screen. You need to write down the OTP on a piece of paper or your smartphone. Then, hold the piece of paper/mobile phone with the code in front of your mobile phone/webcam. Once this is done, you will need to download the Demat POA (Power of Attorney) form, fill it up, and send it to the address below:
Zerodha, #153/154 4th Cross Dollars Colony,
Opp. Clarence Public School,
J.P Nagar 4th Phase,
Bangalore – 560078
How safe is it to use?
Trading with Zerodha is just as safe as trading with any other stockbroker in the country. Zerodha is a debt-free company, and they specialize in broking services. Thus, users can have the confidence of dealing with established professionals.
Also, the advantage of having a Demat account is that all shares and mutual funds are traded via Central Depository Services Ltd, which will take care of your account safety.
What are the charges associated with it?
Zerodha charges the lowest for trading and delivery amongst the various brokers in the country. The following are the charges associated with Zerodha:
- Zerodha trading account charges: Rs 300
- Zerodha Demat account opening charges: Rs 100
- Zerodha trading account annual maintenance charges: Rs 0
- Zerodha Demat account annual maintenance charges: Rs 300
The following are the brokerage charges associated with trading through Zerodha platforms:
- Equity Delivery: Rs 0
- Equity Intraday: Rs 20 per executed order or 0.01%, whichever is lower
- Equity Futures: Rs 20 per executed order or 0.01%, whichever is lower
- Equity Options: Rs 20 per executed order
- Currency Futures & Options: Rs 20 per executed order or 0.01%, whichever is lower
- Commodity F&O: Rs 20 per executed order or 0.01%, whichever is lower
To understand why Zerodha charges are said to be lower than other brokerage firms, have a look at an example. Let’s compare Zerodha charges with a firm A, which charges 0.1% for every trade (this is the lower limit of what most brokerage firms offer today). So for buying and selling, that would be 0.2% of the transaction (0.1% for each action).
If a user does monthly trading to the tune of Rs 10,00,000 across 20 trades (10 trades per month for each buying and selling), then the yearly brokerage a user will have to pay is:
10,00,000*12*.2% = Rs 24000
In Zerodha, regardless of the size of the trade, each trade carries Rs 20 as brokerage. Thus the yearly brokerage a user will have to pay is:
20 (trades)*12 (months)*20 (rupees per trade) = Rs 4800 only
This visible difference is what cements that Zerodha is much cheaper than other brokerage firms in the country.
How is their customer care?
Zerodha has a highly responsive customer care team that can be reached out on all days between 8:30 am and 6:00 pm on 080 4718 1888. Apart from this, they also have the provision to raise tickets on their website or through any of their platforms (discussed below).
Since Zerodha lets you trade across stocks, commodities, and mutual funds on various exchanges, the brokerage firm also offers its users a range of platforms for them to manage their investments better. These platforms and their key features are described below:
1. Zerodha Coin
The Zerodha Coin app lets users trade in mutual funds and allows users to directly buy them from asset management companies. This platform acts as a marketplace for users to compare and contrast between a bouquet of asset management companies and their funds to choose the right one for their investment goals.
The app has over 1.5 lakh investors with Rs 3400 crore worth transactions done through the app. Zerodha Coin supports 40 of the 44 registered asset management companies. The Zerodha Coin app is completely free for all its users.
The following are some key features on the Zerodha Coin app:
- Funds by categories: One of the key features of the Zerodha Coin app is that it helps guide users to the right investment options based on the user’s agenda. This is achieved by segmenting the various mutual funds into predefined categories, such as funds that “save taxes” or offer an “alternative to bank FDs.” These categories are particularly useful for users who have an idea of their investment agenda, but are unclear on the various options available to them.
- Fund house says: Another feature that helps guide users on their investment decision, the “Fund House says” section has videos from the various fund houses talking about their different mutual funds.
Overall, the Zerodha Coin app offers an excellent platform for users to invest in mutual funds, particularly suitable for intermediate traders who have some experience with funds and just need a little guidance to finesse their thought process.
2. Zerodha Kite
Zerodha Kite comes in two versions – the web-based portal Kite 3.0 and mobile-based app Kite Mobile. Both platforms offer the same service, that is, to let users trade stocks and F&O contracts across NSE, BSE and MCX indices.
Zerodha Kite comes with a plethora of features that make it one of the best platforms for equity trading. The following are a few features that stand out for the Zerodha Kite platform:
- Dashboards and Technicals: The Kite platform offers a very interactive view for the user in terms of tracking and providing information to a user about the various stocks they have invested in. The app provides charts and an impressive set of analytics (technicals) for each stock over a given period of time. These technicals also include infographics on how attractive a particular stock is over that period.
- Watch lists: Users can create their watch lists, which can be groups of stocks handpicked by the user. The user can name each list (Ex: Banking stocks, Auto stocks, etc.) with mechanisms for addition and deletion. This is helpful for users who are trying to monitor a group of stocks, categorized as per their requirement.
- Trigger and stop loss setting: A feature particularly useful for those who cannot monitor the market frequently, trigger and stop loss helps users set the price at which stock should be bought or sold, respectively. The action (either buying or selling) will be executed as per the pre-defined value set by the user. This feature is applicable for both intra-day trading as well as long-term trading.
- Fingerprint access (for the mobile app): An added security feature on the mobile app, the fingerprint scanner ensures that your profile and portfolios are safe from unauthorized access even if anyone has access to your phone.
3. Zerodha Pi
Similar to Zerodha Kite, Zerodha Pi also allows users to trade in equity stocks across the various indices. The difference is that Zerodha Pi is an installable trading terminal and provides access to a lot of advanced algorithms for stocks and associated charts, which are not available on Kite.
Zerodha Pi is targeted at the more sophisticated and experienced investors who can make use of the more complex and robust interface. Novice users should, however, try their trait through the Zerodha Kite app, which is simpler to use and acts as a starting point for users.
Sentinel is more of a market alert tool rather than an investment platform. Through Sentinel, users can observe stocks, bonds, commodities, F&O contracts, and currencies across the various exchanges. Apart from monitoring price, users can also check bids and offers through Sentinel.
The tool enables users to set alerts for up to 80,000+ stocks, futures, options, etc. for any period of time, varying from a few hours on the same day to any long-term duration. Users will receive notifications via the Kite website or email when the target price is reached.
Pros and cons of the Zerodha platform
Most of what we read above shows that the Zerodha offers a lot for the user to make the most of their investment strategies. However, the Zerodha apps also have their drawbacks, which put a minor dent on their market-leading reputation. In this section, we take a look at the good and the bad of the Zerodha platforms:
- No need for a minimum balance to open an account with Zerodha
- Lowest charges for brokerage when compared with leading platforms and brokerage firms
- Fixed charges regardless of the volume of each trade
- No brokerage charges for delivery
- Simple and user-friendly interfaces for equity trading
- Robust set of features and tools provided to the users
- Presence across both mutual funds and equity investments
- Numerous delays often limiting the “real-time” investment experience with users even missing out on their target values
- Despite lower brokerage charges, the margins on Zerodha are still lower than what most other players in the market offer
- Unable to invest in IPOs through the Zerodha app
- Lack of useful features on Zerodha Coin app compared to other mutual fund platforms
The bottom line
Overall, the Zerodha suite of platforms offers the most comprehensive set of tools for the user to take advantage of.
Not only is Zerodha as secure as any other broker in the country due to enabling trade via Demat accounts, but also charges users much less in terms of brokerage commissions due to its fixed brokerage charges (regardless of the volume of each trade).
The Zerodha platform is particularly mature for trading in the equities market but not as robust when it comes to mutual funds.
To conclude, we can say that all the features and a responsive customer care team make Zerodha the best candidate for your investment needs.