Which is better Zerodha or Groww for Mutual Funds?

Short Answer

Zerodha as well as Groww, both allow investors to invest in Mutual funds. Groww does not charge any Account opening fees or Annual maintenance Charges but Zerodha charges Rs 200 for Account opening and Rs 300 for AMC. This makes Groww a cheaper and better option when it comes to investing in mutual funds.

Detailed Answer

What are Mutual Funds?

In simple words, a Mutual Fund is a Fund that is formed by small contributions of retail individuals. It is managed by a professional fund manager who buys and sells securities based on the objective of the Fund. Mutual Funds are issued by individual AMC (Asset Management companies) who appoint a Stockbroker or any Financial platform to act as a middleman and to ultimately sell their product to the common Investor.

There are many Stockbrokers who allow their users to invest in Mutual Funds, here we are going to discuss 2 players, who are-

  1. Zerodha
  1. Groww

Zerodha

Zerodha is India’s First Discount Broker and has become the largest Stock Broker in the country. It was started in 2010 and currently, has almost 4 Million active clients which account for more than 19.5% of the total active client base of the NSE (National Stock Exchange).

Groww

Groww is new to the Stockbroking community as it started business in 2016 where it was just a Mutual Fund investment platform but slowly it tapped into the Stocks section in 2020. Groww is one of the fastest-growing Stock Brokers in India. It has acquired more than 6.5 Lakh active clients till date which sums up to approximately 3.68% of the total market share in the NSE.

Zerodha vs. Groww - Comparison

Pricing-

Grow charges Nothing for account opening or any AMC (Annual Maintenance Charge). This is one of the main USPs of Groww which makes it very favorable for Mutual Fund and Stock Investors, as one can open a Demat & Trading account as well as a Mutual Fund investing account for free with Groww.

On the other hand, Zerodha charges 200 for Account opening. This charge includes the Trading & Demat account as well as the access to invest in Mutual Funds. Apart from this Zerodha also charges Rs 300 as an Annual Maintenance Charge that has to be paid every year.

Apart from this, both brokers do not charge any extra fees or commissions to buy or to Sell any Mutual Funds.

Hence by this, it seems that Groww is a better option as it is free to open an Account to invest in Mutual Funds.

Features-

In Groww all the features such as Stocks & Mutual Fund investments are integrated into one app, whereas Zerodha has a separate app known as Coin for Mutual Fund Investing. This gives a new experience to track your investments in Stocks and Mutual Funds separately. Apart from Mutual Funds, Zerodha gives offers more features for the price such as investment opportunities in Bonds, Commodities & Derivatives which Groww lacks.

This in turn gives Zerodha a slight edge over Groww in terms of features.

Conclusion-

Both Groww, as well as Zerodha, include the Demat account in the account opening process. One cannot simply open a Mutual Fund investment account with any of them. Groww charges “0” for Account opening and “0” for AMC whereas Zerodha charges 200 for account opening and 300 every year for AMC. Looking at these it is clear that Groww is a better option for Mutual Funds as there are no extra charges involved as compared to Zerodha.

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