Is it safe to open an account with a Discount broker?
- Asked By
- Updated On:20-Sep-2022
- Replies:1
Short Answer
Yes, it is completely safe to open an account with a discount broker because all discount brokers are subject to strict regulation and only act as an intermediary. They do not have direct access to any of your investments.
Detailed Answer
In India, one can open a demat account with either full-time or discount brokers. But, due to the advantages of discount brokers over full-time brokers, people are inclined more towards discount brokers. However, many are unsure if it is safe to open a demat account with a discount broker in India or not .
Difference between Full-time Brokers and Discount Brokers
Let's go through differences between Full-time Brokers and Discount Brokers:
1. Full-time Brokers
Full-time brokers are conventional brokers who provide their clients with a wide range of services, including wealth and portfolio management, investment advisory, and specialized research.
Here, professionals will ensure that your portfolio is regularly updated and the fat is cut, and you will be charged extra for this. They have physical branches and provide online and offline services.
- Discount Brokers
Discount brokers are stockbrokers who provide the option of buying and selling stocks or orders at incredibly low prices. These discount brokers use cutting-edge technology to provide traders with a sophisticated trading experience.
They have fewer physical branches than full-time brokers, so they don't provide any offline services.
Is it safe to open an account with a Discount broker?
Discount brokers are secure for trading and investing online because all discount brokers are subjected to strict regulation. All transactions made through any discount broker are regulated by the exchange and SEBI.
Even if any broker shuts down, your investment will be completely safe because all your stocks and investments reside under your Depository Participant (DP) ID, which you can access at any time.
Opening Demat & Trading Account with Discount Brokers
- It is crucial to thoroughly examine all of the fees that the discount broker levies, particularly the maintenance and transaction fees.
- Avoid opening multiple demat accounts with discount brokers because doing so will result in extra charges like annual maintenance fees and others, raising your overall expense.
- As portfolio services and guidance are not offered by discount brokers, failing to conduct adequate research prior to making any investments could result in financial loss.
Safe to open an account with a Discount broker
It is entirely safe to open an account with a discount broker. But, before going with any discount broker, you should thoroughly research and evaluate things like maintenance fees and the services the broker is offering. It will give your investment journey a further advantage.
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (0)
When talking about the best stock broker in India, we cannot rule out Zerodha. It is the market leader in bargain stockbroking, is premised in Bengaluru, and accounts for more than 15% of total retail trading activity in the country. Mr. Nitin Kamath formed the leading brokerage firm in 2010 Kamath, and it now has a customer base of over 6 million.
Yes, one can have multiple demat accounts, but there is a restriction: you cannot open more than one demat account with the same depository participant (DP) or broker. Instead, you can open other demat accounts with different brokers.
Yes opening a Demat account in India might be free with some brokers but not all. Apart from the opening charges, a Demat account is not completely free. You will have to pay an Annual Maintenance charge or Demat fee, every year.
Discount brokers have gained a lot of popularity in the past couple of years. Zerodha is currently India's largest and most trusted discount broker which is also the best option for beginners. It has all the necessary qualities required for a good broker like low commissions, low-maintenance charges, high-quality trading terminal, etc.
I was just going through some stock broker reviews. So, I thought of sharing my opinion, A side by side Comparison of two popular stock brokers: Sharekhan vs. Zerodha.
You might have read about different stock brokers in India. Here I'll review two of the most popular discount brokers in India: 5Paisa v/s Zerodha Comparison.
Angel Broking and Paytm Money both these platforms are popular among traders. But if you are a beginner or if you want to switch to a new trading platform and you are considering choosing one of these two, and then you came to the right place.
As online trading is getting popular every day, it is becoming even more important to choose the right trading platform. Choosing the best trading platform can give you more flexibility to trade in the various trading market.
Yes, discount brokers are safe in India and can be used for trading or investing because they are all strictly regulated by SEBI. Let's find out in detail why discount brokers are safe in India.
Paytm Money and SBI Cap Securities have many differences when it comes to the brokerage, segments of investment offered, and other such parameters. We have illustrated everything in detail below to know what these differences are and which one you might want to choose.