You must be searching for a top stock broker for small investors in India if you are a novice or a little investor in order to reduce your trading expenses. The needs of novice investors are covered in this article, along with tips on how to locate the finest stock broker in India for novice investors.
Who is a small investor?
Small investors are not generally defined. For the purposes of this essay, a small investor is someone who either occasionally purchases stocks or transacts annually in securities worth a few lakhs. Small investors are individual investors who purchase equities to build their own personal wealth.
Trading Needs of Small Investors (Traders) :
Small investors have very unique trading demands. They want to keep their trading expenses to a minimum because they trade in small volumes. The following are some typical trading requirements for small investors:
Low Brokerage Plans-
Small investors engage in sparse trading. Naturally, they make little money on their trades. When your trade value is in the thousands, your profit will often be in the range of a few hundred. Now, their profit is further reduced if they pay hefty brokerage fees. Small investors require stock brokers with modest commissions.
Savings on Trading & Demat Accounts-
Trading in exchange-traded securities requires both a trading and a demat account. Your trading account gives you access to trading platforms and stock exchanges where you may place buy/sell orders. The demat account is a digital repository where you can store your securities. Both of these accounts have two different sorts of fees: opening fees that are assessed at the moment the account is opened and AMCs (Annual Maintenance Charges) that brokers assess annually to maintain the accounts. Small investors should seek out stock brokers that can lower these costs.
Free and Easy to Use Trading Platforms-
Trading platforms that are free and simple to use are another important criterion for small investors. They don’t require sophisticated trading platforms. Their trading costs will go up if there are any fees on trading platforms. Therefore, they must locate the greatest stock broker in India for small investors who can provide them with cost-free trading tools and platforms.
How to find the best broker for small investors in India to reduce your trading costs?
You’ll be astounded at how much money you may save on trading expenses with just a few hours of online investigation. Here are some recommendations for small investors to lower their trading expenses:
Look for offers from brokers-
The stockbroking sector is very cutthroat. Discount and full-service stock brokers can provide enticing promotional offers to draw investors. Look for brokers who provide lifetime free demat accounts and accounts with no account opening fees. By opening a BSDA (Basic Service Demat Account), which has 0% AMC fee on stock holdings up to Rs 50,000, you can also reduce your demat account fees.
The annual management charge (AMC) for keeping assets exceeding Rs 50,000 but below Rs 1 lakh is Rs 100. Therefore, a BSDA demat account can drastically reduce your trading charges if your annual trade turnover is over Rs 1 lakh. All brokers, including ICICIdirect, Axis Direct, SAS Online, and Trade Smart Online, provide the BSDA facility.
Opt for flat or fixed brokerage plans-
If you are in a percentage-based brokerage plan, there is a good probability that your brokerage fee will be higher than it would have been had you been in a flat-fee plan. The idea of inexpensive and flat brokerage plans was first presented by online discount brokers, a new class of brokers. Regardless of the trade value, they impose a flat brokerage fee. Regardless of the trade value, 5paisa costs Rs 10 each executed order whereas Zerodha charges Rs 20.
Therefore, you will pay a brokerage fee of between Rs 10 and Rs 20 if you buy stocks worth Rs 5000. Brokerage fees for percentage-based brokerage typically vary from 0.25 to 0.75% per order.Therefore, you would pay between Rs 12.50 and Rs 37.50 for a deal of Rs 5,000. Many full-service stock brokers now offer both flat and percentage-based brokerage plans as a result of fierce competition from cheap brokers.
Find brokers offering free trading platforms-
The majority of brokers, including Fyers and Kotak Securities, provide free trading platforms. You would also require easy-to-use trading systems as a small investor. Research a few brokers, read reviews of the brokers and trading platforms, and then choose the platform that best meets your demands to locate such a trading platform.
You can choose the best broker for small investors in India by comparing different brokers on the aforementioned factors.