Investing or Trading in Stocks has become simpler thanks to the internet. But with that comes the difficult decision to select the Best Online Broker to trade. It’s important that you select the right broker for yourself right before you start trading. Read on to find out more about How to Choose a Stock Broker in India.
Firstly, I would like to Clarify that your First broker is not always going to be your Broker for life. You may definitely turn to another broker at any time you want. However, it’s good to start with a decent broker, and choosing a bad stockbroker can ruin your First investment/trading experience. But, with so many choices available in the Market, it is hard to come to a decision.
Finding The Best Stock Broker is not that easy, as there are more than 250 Stock Brokers in India. So, Here we are going to make this task easier for you in this Blog Post.
Table of Contents
How to Choose a Stock Broker In India?
1. Conduct a Thorough Research
You should read reviews of your Shortlisted Brokers online and what customers have to say about them. Since they will be executing your trades and handling your portfolio, you will have to find out what there is to know about your broker.
Listen to the guidance of active traders/investors, but do not blindly obey them. By visiting different stockbroker’s website, you can carry out your own analysis. Get a general idea about the stockbroker,Account Opening fees, Maintenance Charges, Customer Support etc.
2. Range of Trading Segments Offered
Different people have Different Financial Goals and so they like to invest and/or trade in different types of financial products including Equities, Futures And Options, Commodity, Currency, Mutual funds, IPOs, Bonds and so on. Narrow down your preferred trading or investment products and check what different stock brokers have in store for your Preferred Trading Segment.
3. Pricing And Brokerage
Pricing is not everything, but one of the crucial factors in choosing the Right Stock Broker for you. When we say Pricing Factor, It includes:
Account Opening Fees
To Open a Trading & DEMAT Account, you need to pay some fees (called Account Opening Charges). These charges differ from one broker to another and these are decided by stockbroker itself. Some of the Stockbrokers charge pretty High Account Opening Fees for the account, although some of them even offer it for FREE.
Brokerage and Other Charges of the Broker
Again, Different types of stock brokers charge brokerage differently. Some Brokers Like Zerodha, Groww offer Zero Brokerage on Delivery Trades (Investing) and as low as 0.03% Brokerage per trade. Some Brokers charge Flat Fees per Trade. You should take Brokerage seriously because whether you get Profits or Losses, you have to pay Brokerage to the Broker.
To Maintain your DEMAT and Trading account with your stockbroker, there is another fee that you need to pay on an annual or Monthly basis. Again, as account opening charges, annual maintenance charges (or AMCs) differ from one Stock broker to another. Some Broker have High maintenance Charges.
If you are a long-term investor and are not going to trade on a regular basis, then we recommend you to go with brokers having low or almost no annual maintenance fee, otherwise you will have to pay this cost on a regular basis without using their services.
4. Customer Support Service
There will be a few instances when you need technical help. In such situations, it’s helpful to have someone to look for. Do not ignore customer support. Look for reviews before you pick any stockbroker, and if the customer service is bad, then you need to look for another broker. How fast a Broker Responds to Client’s Queries or Complaints is another Important Factor to Consider.
You can Check Report of Redressal of Complaints lodged by clients against different Indian Brokers here.
5. Trading Platforms and Tools
This is one of the most critical things to Consider while Selecting a Broker. Check if the trading platform offered is user-friendly and easy to use. A Good Trading Platform is the one that offers:
- Interactive and Reliable Charting Features
- Clean and Easy to Use Trading Platform
- Reliable and Easy Order Placements
- Ability to Handle Peak Traffic
6. Broker’s Reputation & History
You can check the Broker’s History by considering- When the Broker started its Operations, How it Evolved over time, How many Offline and/or Online Partners and Branches it has, Number of Active Clients, etc. You can also Consider the Average Daily Turnover Value of the Broker, Adaptation to new Technological Methods and other such Factors.
In the end, We’ll suggest you to pick a Stock Broker that best fits your needs. Share this Article with your Friends who are about to Open their DEMAT & Trading Account.
You may pick one of our shortlisted brokers based on your requirements. Click on the Following post to Read our Detailed Comparison of some of the Leading Stock Brokers.