Investing in the stock market is becoming more popular in India as more information becomes available and the stock market and its concepts are simplified. Every day, more investors begin their investment journey.
Choosing your trading mode is the first step after you have decided and are ready to begin your stock market journey. With the advancement of technology, most investors prefer online trading, but there are still many who prefer the traditional way of trading, which is through physical brokers.
Online trading has recently become more popular due to the advantages it has over physical trading. This article is not about online trading or physical trading, it is about how to choose the cheapest brokerage trading account. Since you will be required to pay a brokerage fee in both online and physical trading.
A brokerage fee is a fee charged by a broker for executing and enabling transactions, services, and a product portfolio that it provides. You pay the brokerage fee because the broker will not only provide you with a Demat and Trading account, both of which are required for stock market trading but also a slew of other services associated with the accounts.
Since you must purchase a brokerage trading account, here are a few pointers to help you through the process.
- Choose Online Trading – Because online traders do not typically use other services such as consulting, the brokerage fee is lower than in physical trading. The process of opening a Demat account or a trading account is also quite simple, and everything can be done from the comfort of one’s own home by visiting the broker’s website.
Demat meaning is that it is an account with the broker that holds your securities and shares in digital format, and the trading account facilitates stock market trading by letting you buy and sell stocks.
- Research – Regardless of the mode of trading, you should research and compare all existing competitors in the market to find the best deal for you in terms of cost and service. It’s similar to how you compare brands before buying anything. It protects you from the consequences of poor decision-making.
- Analyse the products and services portfolio – Several brokers in the market offer free Demat accounts; however, their portfolio may be lacking. They may not provide multiple products such as derivatives, options, and commodities in addition to equity.
Their services may also be subpar, such as late SMS and email delivery or poor customer service. It is not the same with all brokers who offer free Demat accounts, but it is best to compare product and service portfolios of all brokers before making a decision. After all, your brokerage fee should be worthwhile.
- Calculate other charges too – A broker may charge other fees in addition to brokerage fees, such as account maintenance fees. You must check all of these because a broker may charge lower brokerage fees but higher other fees.
- Technology Adaptability – If you choose a physical broker, make sure that the broker is technologically savvy and can assist you in doing things online as well. If the time comes, it is also able to assist you in transitioning from physical trading to online trading. Your online broker, on the other hand, should be using new methods and providing you with better services.
Obtaining the lowest brokerage trading account is beneficial, but you must ensure that you check these and obtain the best deal for you. Customer reviews are the best way to find a good broker with a low brokerage fee but efficient service. They are mostly accurate and provide a clear picture of any broker.