#1. Our Ratings
- Fee Structure – 5/5
- Customer Service – 3/5
- Usability – 4/5
- Variety of Offerings – 4/5
- OVERALL – 4/5
Zerodha is a discount brokerage firm. It offers an online platform that allows the user to trade stocks, commodities, and currency derivatives. In this zerodha review, we carefully analyse its features.
The most prominent USP for Zerodha is that it charges a flat brokerage of Rs. 20 or 0.01%, whichever is LOWER, on every trade. Equity delivery is FREE. So, in effect, the user will never pay more than Rs.20 for a particular trade.
The concept of discount brokerage has picked up in recent times. Zerodha happens to be the first discount broker in India. Zerodha has grown tremendously since its incorporation in 2010 and it accounts for a massive 10% of daily trading volumes on the BSE, NSE, and MCX.
Kite is Zerodha trading application. All software applications including website, mobile trading, and trading terminal are available free of charge. Furthermore, the mobile app supports Android and iOS.
Whether one trades a few times every month or hundreds of times in a day, Zerodha offers a technologically advanced and economically cheap option.
| 1. Our Ratings|
2. Type of Accounts on Zerodha
3. Account Opening Charges
How to Open Zerodha Account Online
4. Trading Platforms
(i) Pi Trading Platform
(ii) Zerodha Kite
(iv) Coin (Mutual fund )
(vi) Call and Trade
(vii) Partner platforms
(viii) Small Case
(x) Zerodha Sensibull
(xi) Zerodha StockReports+
5. Educational features
6. User Support
7. Zerodha Margin Exposure
8. Pros and Cons
#2. Type of Accounts on Zerodha
It offers Trading account and Demat account. Switching between the two is also quite seamless. With a Demat account, a user can purchase mutual fund units (Direct Plan option) and make SIP investments. On the other hand, a Trading account allows the user to purchase stocks, forex, futures and options, and commodities.
NRIs can also trade on Zerodha by opening an NRI account (and linking NRE/NRO account to Zerodha Demat account). NRIs can engage in delivery based trading. However, intraday trading is not allowed as per Indian government rules. NRIs can trade stocks and equity F&O via the NRI account. Fees for NRIs are much higher than domestic users. NRIs pay Rs.200 per trade or 0.1%, whichever is lower.
Zerodha does not offer the option for investing in an IPO, OFS, or FPO. However, this is in line with the offerings of other discount brokerages.
Zerodha Coin account offers the opportunity for investing in Government Debt Securities like Bonds and T-Bills.
In order to trade in commodities, users have to open a Zerodha Commodity account along with a Trading account.
#3. Account Opening Charges
|Trading Account Opening Charges||300 INR|
|Demat Account Opening Charges||100 INR|
|Trading Annual maintenance charges (AMC)||0|
|Demat Account Annual Maintenance Charges (AMC)||300 INR per year|
#4. Trading Platforms
There are multiple trading platforms offered by Zerodha.
(i) Pi Trading Platform
Pi is Zerodha’s technologically advanced trading platform. It has advanced charting features. There is also the option of creating algorithms, formulating trading strategies, and backtesting. Moreover, expert advisors provide strategy alerts on this platform as well.
(ii) Zerodha Kite
Kite is Zerodha’s HTML web-based fast trading platform. You can operate it on a web browser of a computer or from mobile phones and tablet devices as well. Both Android and iOS systems are compatible with Kite.
Kite offers complete market watch capability, advanced charting (6 types of charts) for a massive 100 indicators, advanced order types like Bracket and Cover, millisecond order placements, and more. Furthermore, Kite is free of cost for Zerodha users.
Kite’s mobile app has live data from BSE, NSE, and MCX. A user can trade and monitor the Indian stock and commodity markets. Consequently, the user can get real-time quotes of over 30,000 scrips on the Kite mobile app.
The Console is Zerodha’s back-office platform. It is a platform that allows users to monitor all their investments in one place. Stocks, derivatives, and mutual funds can all be organized on Console. Secondly, this platform also allows users to make withdrawal requests, access reports, get account statements, and download contract notes. The Console also has useful tools like heatmap and trade book. The Console is an extensive reporting dashboard.
(iv) Coin (Mutual fund )
A Coin is a relatively new platform that Zerodha has launched recently. It allows users to invest in direct plans of mutual funds. Also, investing in direct plans can save the user a hefty of 1-2% in annual returns. That is a significant saving every single year.
If the user likes setting up price alerts, then Sentinel is the cloud-based solution that Zerodha offers. It is a platform that allows users to set price alerts on futures, options, and stocks. Sentinel price alerts will trigger even when the computer is off.
This is a complete departure from other price alert tools, which only trigger if the computer is on. The cloud-based technology allows Sentinel to keep itself updated in real-time regardless of whether the user’s device is on or off.
Notifications are received on Kite or via email. In addition, Sentinel allows the user to set alerts across 80,000 stocks, derivatives, and bonds trading on various exchanges.
(vi) Call and Trade
For those users who are either not online or do not wish to transact online, Zerodha has Call and Trade. This is a paid service that users can use to call and make their trades over the phone. It is similar to how many conventional brokerages operated a few years ago. However, the Call and Trade service is not free. It costs Rs.20 per trade.
(vii) Partner platforms
Zerodha gives its users access to platforms and tools that are developed by other companies that also happen to use Zerodha’s platforms. These tools integrate easily with Kite. Their partner platforms are as follows:
(viii) Small Case
Users that like to invest in a theme or a strategy will find Small case to be quite handy. This platform creates portfolios around a specific idea or trend. Hence, users can invest in such ready-made portfolios of stocks. For instance, themes could be electric vehicles, large-cap stocks, or industry-driven ideas. All the user has to do is select the theme and click a button.
(ix) Zerodha Streak
Want to engage in some algorithm trading but don’t know how to code? Fear not, because Streak is just the right solution. It is a cloud-based platform that allows individual retail traders to create their very own algorithms without becoming a coder.
Streak even allows users to backtest their algorithms against historical market data. That way, you execute the most refined and accurate version. Streak also has other useful features like price alerts, a real-time flow of information, and options to manage multiple positions.
Users who want to trade options can use the Sensibull platform to get suggestions on their trading strategies. These suggestions are based on the user’s own market view. Users can also use Sensibull to compare various strategies and project outcomes for each one of the strategies. Consequently, it will allow users to better understand the risks behind each strategy. Multiple custom trading strategies can be created using Sensibull.
Last, but not the least, StockReports+ is a Thomson Reuters tool that has over 3000 analyses and research reports. These reports cover individual stocks, industries, and market situations. More importantly, over 1500 Indian companies are covered by these reports.
You also get Ratings on businesses and stocks. The big difference between a discount broker and a regular full-service broker is the service level and the research content. Evidently, Zerodha somewhat plugs the research gap with StockReports+.
#5. Educational features
Zerodha has a couple of educational features on its platform which can help new and experienced users with specific topics related to trading and investing.
Firstly, we have the Zerodha Varsity feature. Much like a real varsity, the Zerodha Varsity offers courses on technical and fundamental analysis. Futures and Options trading and strategy are also covered under its courses. Evidently, it is a great way for users to educate themselves on specific topics related to investing and trading.
The second educational feature is the trading Q&A. It is a community-driven free forum where anyone can ask questions about specific topics related to investments or the actual Zerodha platform. Community members answer these questions and, at times, the company representatives also participate in the discussions.
#6. User Support
Zerodha has a support document library of over 600 documents that provide answers to the most commonly asked questions on the platform. If that is not enough, or if an investor wants to ask questions specific to a trade that he/she made, then there is a help ticket system.
Hence, this kind of system makes the entire process more credible and time-bound. Simply sending emails to [email protected] is not necessary.
#7. Zerodha Margin Exposure
|Equity Delivery||1x (No Margin)|
|Equity Intraday||Upto 20x based on stock|
|Equity Future||Intraday – 2.5x, Carry Forward: 1x|
|Equity Options||Intraday – 2.5x, Carry Forward: 1x|
|Currency Futures||Intraday – 2.5x, Carry Forward: 1x|
|Currency Options||Intraday – 2.5x, Carry Forward: 1x|
|Commodity Futures||Intraday – 2.5x, Carry Forward: 1x|
#8. Pros and Cons
In a nutshell, Zerodha has plenty of advantages and disadvantages. Let us look at the pros first.
- Zerodha offers free equity delivery. Hence, when you buy stocks using your own money (without margin) you do not pay any brokerage fees.
- Zerodha has extremely low fees on other trades like commodities, derivates, etc. It only charges 0.01% or Rs.20. Evidently that is the best in the industry. Only 5paisa has a lower fee.
- Zerodha has recently become a self-clearing broker. This means that they do not charge any clearing fees to their customers which may arise if a third-party clearing agent is involved.
- Moreover, there are no extra charges for using software, trading terminal or other such platforms. It does charge the user for using platforms like Call and Trade or StockReports+. However, those fees are also pretty low as Zerodha has tie-ups with partner platforms and it leverages that relationship to offer discounted rates.
- There is no minimum balance required to open an account at Zerodha. Hence, anyone can open an account with the smallest amounts.
- Zerodha happens to be the first broker to offer retail investors with Bracket Orders with an option of Trailing Stop Loss. This feature is offered on Equity and F&O trades.
- Zerodha also offers its users Collateral Margin (money against shares) for trading. There are over 1000 approved stocks (and ETFs) which can be used as such collateral.
- Zerodha has offline physical branches too. It has over 200 of them all over India.
- Zerodha has useful customer support features like Trading Q&A and educational features like Varsity.
Now, let us look at some of the disadvantages or weak points of Zerodha.
- There are no monthly plans or prepaid plans.
- The Call & Trade option is not free. Unlike many of Zerodha’s other tools and features, the Call & Trade service costs Rs. 20 per trade which can be a significant amount for someone executing multiple trades a day without an internet connection.
- There is no IPO facility. Therefore, users cannot participate in OFS and FPO either.
- Lifetime free AMC Demat accounts are not offered by Zerodha.
- Mac and Linux operating systems are not compatible with any of Zerodha’s software packages and trading platforms.
- Zerodha Back Office (Console) is not integrated with the trading platform. It is a separate website. The data on the back office platform gets updated overnight and isn’t real-time.
- Margin against shares option is not available in the equity cash segment.
- Good Till Cancelled (GTC) and Good Till Date/Time (GTD) orders are not available in the equity segment. They are only available for commodity trading.
- CO/BO options (trailing stop loss) are not available for Bank Nifty (weekly settlement).
- Some hidden charges include Rs.1 fee for SMS alerts, Rs.9 instant payment gateway charges, and DP charges of Rs.8 per transaction for delivery based equity selling. An additional fee of Rs.20 per order is levied for MIS/CO/BO positions which are not squared off by the user.
Overall, Zerodha offers a pretty robust solution for investing and trading. It has the lowest fee structure in the industry. It also offers plenty of convenience through the use of web and cloud-based technologies to offer user-friendly platforms and tools.
Useful features like partner platforms, research content, and educational initiatives make Zerodha more than just a barebones discount brokerage. Its customer service tends to get some negative reviews, but there are useful customer support features like a Q&A feature and a help ticket system, both of which contribute positively towards customer service.
Overall, Zerodha is one of the best options for an investor looking to trade at a low cost. Zerodha is not a full-service brokerage and hence it will not have the personal touch or the depth in customer service that big brokerage houses provide. It is more of a value for money option and a good bet for someone who knows what they are doing. It does not offer any individual attention or handholding.