Zerodha Vs Trade smart Online

Which is better Zerodha or Trade Smart Online

In this article, we are going to conduct a side-by-side comparison of two India’s biggest and most popular discount stock brokers: Zerodha Vs Trade Smart Online.

Now, it is often quite hard for a newcomer in the market to find an appropriate discount broker to work with. And with so many discount brokerages firms here and there it can become cumbersome.

But before we start comparing these two firms, I’d like to talk a little about each of them so that you know who we are dealing with here.

Zerodha

  • They are one of India’s leading and most popular discount stock-brokerage firms.
  • The firm was established in 2010 within eight years they have been named “India’s best retail brokerage” by the National Stock Exchange.
  • They deal in all the usual trading segments like equity, derivative, commodity, currency and more.
  • brokerage charge as low as Rs. 20 or 0.01% (whichever is lower) per trade
  • Certainly, have gained trust among their vast client base.
  • They certainly know their business.

Trade Smart Online

  • Trade Smart Online is the discount-brokerage subsidiary of the full-service brokerage firm VNS Finance.
  • Which was founded in 1994?
  • they were incorporated into NSE in 2012.
  • Within a few years, they have also become a very popular name in the discount brokerage community.
  • They also charge their clientele a fee based on per trade and is as low as Rs. 15. They certainly are a firm to look out for.

So now that we know about the two discount brokerage firms let us begin our comparison. However, one thing should be kept in mind that this is only a comprehensive study of these two firms published as a comparison.

In no way should this be treated as a certificate of merit; the final decision to choose a firm depends upon you. This article is provided for a better understanding of the attributes of the two firms so that you can make an informed choice. Having said that, let us begin!

Zerodha Vs Trade Smart Online Company Overview

We’ll take a quick glance at the company profiles of these two firms

Particulars Zerodha Trade Smart Online
 
Company Type Private Private
Established in 2010 1999; incorporated in NSE in 2012
Headquarters Bangalore, India Mumbai, India
Founder(s) Nithin Kamath Vijay Singhania
Type of Broker Discount Broker Discount Broker
No. of branches 22 branch & 90+ partner offices Pan India 1 branch
Supported Exchanges NSE, BSE, MCX & MCX-SX NSE, BSE, MCX, NCDEX
Website URL www.zerodha.com www.tradesmartonline.in
Active Client Base 8,00,000+ 22,000+

Services/Products Compare

In this section we will look at the various services and/or products (also called Investment options) provided by these two firms. As we saw above, both the firms are in exchanges like BSE, NSE, and MCX (for commodities trading). Zerodha is available in MCX-SX while Trade Smart Online is available in NCDEX.

While both deal in the usual trading options like Equity, Currency, Commodity and Derivatives Trading & ETF, they do lack in certain areas such as Debt, Banking, Insurance, Forex, Equity SIP investment and PMS. While Zerodha does not deal in IPOs, Trade Smart Online sure does. The exact opposite could be said about bonds or NCD and MF SIP investments. Both firms deal with MFs.

Investment Options Zerodha Trade Smart Online
Stock/Equity Trading Available Available
Commodity Trading Available Available
Currency & Derivatives Available Available
Online IPO Application Not Available Available
Mutual Funds Available Available
Bond/NCD Available Not Available
Debt Not Available Not Available
ETF Available Available
Banking Not Available Not Available
Insurance Not Available Not Available
Forex Not Available Not Available
Equity SIP Investment Not Available Not Available
MF SIP Investment Available Not Available
PMS Not Available Not Available

Account Opening Charges & AMC

We have seen what investment options you can avail from these two firms. Now we will look at the various charges associated with trading and Demat accounts with these firms.

Open zerodha demat account
Open zerodha demat account

These charges include the account opening as well as annual maintenance charges. There is another section for the Demat Account charges and features.

The account opening charges for both the firms is Rs. 200. However, Zerodha offers a courier option for application forms, in which case they charge a total of Rs. 300. Neither of the two firms charges any AMC for the trading account.

Demat account opening charges for Zerodha is Rs. 100 whereas the same for Trade Smart Online is Rs. 200. Demat AMC costs for both the firms are Rs. 300.

Open Demat Account With Trade Smart
Open Demat Account With Trade Smart

Both the firms offer DP services; while Zerodha has CDSL as their only depository source, Trade Smart Online has another additional depository source in NDSL.

Particulars Zerodha Trade Smart Online
Trading Account Opening Rs. 200; Rs. 300 if you need to courier account opening forms Rs. 200
Demat Account Opening Rs. 100 Rs. 200
Trading AMC Free Free
Demat AMC Rs. 300 Rs. 300
Commodity Fee Rs. 200 N/A
DP Services Available Available
Depository Source CDSL CDSL & NSDL

Demat Account Comparison

As I said earlier, this section deals with the Demat Account and its features as offered by the two firms. Before we go into details. However, I think it is best if I illustrate a bit about a Demat Account, for many of you may be confused about what it means and what it is used for.

To understand what a Demat account is, you need to understand the meaning of the word Demat; it comes from another word: dematerialized. This account is your main account apart from the trading account.

You use this account to hold all your shares and assets like govt. securities, ETFs, mutual funds, bonds and more. Whenever you buy a share, it is first converted from its physical forms into an electronic one.

This electronic share is then put into your Demat account for storage. This has made online trading a very easy task; well in regard to storage.

In India, depositories like CDSL and NSDL offer free Demat Account services that are provided to traders and investors via stockbrokers like Zerodha and Trade Smart Online, who in turn charge certain nominal fees for its upkeep and maintenance. You don’t need to sweat a brow.

You may ask if there is any benefit of this service; we’ll check out the following:

  • Easy share transferring;
  • Assets in Demat accounts can be used as collateral while securing various loans;
  • Helps execute a DIS to the depository source smoothly;
  • You can easily trade your shares by converting them from physical to electronic forms and vice-versa.

Now, for the comparison of the Demat Accounts from the two firms; we have already seen the various opening charges and AMC for this account as charged by Zerodha & Trade Smart Online.

There are a few other charges associated with the Demat account like Pledge creation and closure charges, transaction charges on Debit per ISIN, Pledge creation and closure confirmation charges, Pledge Invocation charges and failed instruction charges.

Particulars Zerodha Trade Smart Online
Demat Account Opening Rs. 100 Rs. 200
Advance Deposit NIL NIL
Demat AMC Rs. 300 Rs. 300
Depository Source CDSL CDSL & NSDL
DP Services Available Available
DP ID 81600 N/A
Transaction Charges on Debit per ISIN Rs. 13.5 per transaction (Rs. 8 + Rs. 5.5 CDSL charges) Rs. 25 minimum or 0.02% (whichever is higher)
Demat Charges Rs. 150 per certificate + Rs. 100 courier charges Rs. 500/ certificate/ market lot of 100 shares or less, or minimum Rs. 500/ request
Remat Charges Rs. 150 per certificate + Rs. 100 courier charges + CDSL Charges Rs. 500/ certificate/ market lot of 100 shares or less, or minimum Rs. 500/ request
Pledge Creation Rs. 20 + CDSL Charges Rs. 200 per scrip
Pledge Creation Confirmation NIL NIL
Pledge Closure Rs. 20 + CDSL Charges Rs. 200 per scrip
Pledge Closure Confirmation NIL NIL
Pledge Invocation Rs. 20 Rs. 200 min. or 0.01% (whichever is higher)
Failed Instruction Charges Rs. 50 per instruction NIL

Zerodha Vs Trade Smart Online Transaction Charges

This section deals with the various transaction fees charged by the two firms on various trading segments like Equity Delivery, Futures, Intraday & Options, Currency Futures & Options and Commodities Trading.

The obvious question that may arise here is how they calculate and charge these fees. Let’s see how.

What these firms do is, they levy a certain percentage of your trade capital, otherwise called trade value and the amount it gives is your transaction charge for the trading option.

This means, the more is your trade value, the higher is your transaction charge. Let us take an example for a better understanding.

We see from the table below that Zerodha charges their clients 0.0019% in Equity Futures while Trade Smart Online levies about 0.0024% in the same segment.

These percentages are defined and regulated by the various stock exchanges like NSE, BSE, etc. The percentages cited above were as per NSE regulations. There is no strict limit as to what percentages the brokerage firms can levy; there is however a range within which every firm must set their charges.

Particulars Zerodha Trade Smart Online
Equity Delivery NSE: 0.00325% BSE: 0.003% (on buy & sell) NSE: 0.0035% Rs. 350 per Crore
Equity Intraday NSE: 0.00325% BSE: 0.003% (on sell only) NSE: 0.0035% Rs. 350 per Crore
Equity Futures NSE: 0.0019% BSE: 0.003% (on sell only) NSE: 0.0024% Rs. 240 per Crore
Equity Options NSE: 0.05% BSE: 0.003% (on premium) NSE: 0.0715% Rs. 7150 per Crore
Currency Futures NSE: 0.00135% BSE: 0.00022% NSE: 0.00165% Rs. 165 per Crore
Currency Options NSE: 0.044% BSE: 0.001% (on premium) NSE: 0.06% Rs. 6000 per Crore
Commodities Trading Non-Agri: 0.0036% Agri: 0.00275% Non-Agri: 0.0039% Agri: 0.00275%

Brokerage Plans & Charges

Now we will look at the various brokerage plans and compare their features and charges. While Zerodha has only one standard brokerage plan, Trade Smart Online has three different plans with slight changes in the three plans overall.

The brokerage charges differ for the three different plans from Trade Smart Online. The plans are Power Plan, Value Plan and Infinity Plan. Among the three only the last one i.e. Infinity Plan has a monthly subscription feature while the other two don’t.

Zerodha offers free Equity Delivery, whereas Trade Smart Online offers the same in only the Infinity Plan while charging for the segment in the other two plans.

Both Zerodha and Trade Smart Online charges for the remaining trade segments like Equity Intraday, Futures & Options, Currency Options & Future and Commodity Trading.

Both the firms charge Rs. 20 per executed order for their Call & Trade feature. There is no hidden fee for either of the firms and there is no minimum brokerage either. You can also avail the Brokerage and SPAN Margin Calculators for both the firms.

Due to the scope of the table furnished below, the Monthly subscription of the Infinity Plan could not be given.

As you may notice that everything is free in that plan. This is because the plan is a monthly subscription schemed. This means all the trade segments come within its subscription price. The subscription prices are as follows:

  • Equity and Futures & Options Trading: Rs. 3999;
  • Currency Trading: Rs. 1999;
  • Commodities Trading: Rs. 3999.
Brokerage Plans
Particulars Zerodha Trade Smart Online
Multiple Plans Not Available Power Plan, Value Plan & Infinity Plan
Monthly Plans Not Available Only Infinity Plan
Yearly Plans Not Available Not Available
Brokerage Charges
Particulars Zerodha Power Value Infinity
Equity Delivery Free Flat Rs. 15 0.01% Free
Equity Intraday Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 0.01% Free
Equity Futures Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 0.01% Free
Equity Options Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 Rs. 7 per lot Free
Currency Futures Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 0.01% Free
Currency Options Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 Rs. 7 per lot Free
Commodities Futures Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 0.01% Free
Commodities Options Rs. 20 per executed trade or 0.01%; whichever is lower Flat Rs. 15 Rs. 7 per lot Free
Other Brokerage Charges
Particulars Zerodha Trade Smart Online
Minimum Brokerage NIL NIL
Hidden Charges NIL NIL
Call & Trade Fees Rs. 20 + 18% GST per executed trade Rs. 20 + 18% per executed trade
Miscellaneous
Particulars Zerodha Trade Smart Online
Brokerage Calculator Available Available
SPAN Margin Calculator Available Available

Taxes & other Government Charges

As you can probably understand, these are the taxes and charges paid to the Indian Govt. directly by the investors and traders. Thus, the various brokerage firms have no influence over the rates.

However, they do pay these taxes themselves and the traders need not worry. They simply pay the money to the Govt. tax houses on your behalf and cut the amount from your account.

These taxes include SEBI Charges, STT or Securities Transaction Tax, GST or Goods and Services Tax and Stamp Duty.

Particulars Zerodha Trade Smart Online
Securities Transaction Tax (STT) 0.0126% of total turnover
SEBI Charges Rs. 15 per Cr.
Goods and Services Tax (GST) 18% on brokerage + transaction charges
Stamp Duty As per the Client’s state of correspondence

Exposure/Margin or Leverage

We all have heard and know what leverage means in real estate. It is almost the same for the stock market. However, we call it Margin Trading, where an investor would normally buy shares more than he is financially capable of buying and handling.

He does this by borrowing capital to invest in more stocks. This can generate huge returns sometimes, while at other times this can bankrupt an investor.

Therefore, it is a very important and yet risky strategy for trading in the share market. You may be wondering what Margin Trading has to do with discount brokers.

Contrary to what you might think, they play a major role here. They lend capital and/or shares to their clients who want to margin trade and in return, they charge interest upon that amount. The margins vary according to what segment you are trading in.

Particulars Zerodha Trade Smart Online
Equity Delivery No margin No margin
Equity Intraday Upto 20x based on the stock value Upto 30x
Equity Futures Upto 2x MIS: 3x| BO: 7x| CO: 7x
Equity Options Upto 3x (only selling) MIS: 3x| BO: 7x| CO: 7x
Currency Futures Upto 12x MIS: 3x| BO: 3x| CO: 3x
Currency Options Upto 2.5x MIS: 3x
Commodities Trading Upto 2.5x MIS: 2x| BO: 6x| CO: 6x

Zerodha and Trade Smart Online Research & Advisory

This is a part where every discount broker lacks impression. Various market researches and reports, useful trading tips & tricks, etc. are all in the domain of full-service brokers. However, discount brokers do provide a few among them. For example, Zerodha provides Equity Reports.

However, I have attached a table of various types of research reports and analysis’s that are furnished by the full0service brokers. Feel free to scroll down if you are not interested in them, although I’d recommend going through them once.

Particulars Zerodha Trade Smart Online
Equity Reports Available Not Available
Mutual Funds Research Not Available Not Available
ETF Reports Not Available Not Available
Market Report Not Available Not Available
Free Tips Not Available Not Available
Company Result Analysis Not Available Not Available
Company Stock Review Not Available Not Available
IPO Reports Not Available Not Available
Quarterly Analysis Not Available Not Available
News Alerts & Notifications Not Available Not Available

Trading Platforms & their features

With the world converging towards a utopia of technology, discount brokerage firms are not lagging at all. In this age of technology, you can trade on the share market online from the comfort of your drawing room. Trading Platforms are nothing but various software’s designed for the express purpose that I explained just now.

These platforms have an array of cool features, some of which are freely accessible, while others need to be paid for. Both Zerodha and Trade Smart Online provides trading platforms.

Particulars Zerodha Trade Smart Online
Platforms Details
Desktop Browser Platforms Available Available
Desktop Platforms Details Zerodha PI NEST & Fox Trader
Demo Platform Available Available
Windows Platforms Available Available
Mac OS Platforms Not Available Not Available
Web Trading Platforms Available Available
Web Platform URL kite.zerodha.com sine.tradesmartonline.in/
Web Trading Demo Available Available
Mobile Site Available Available
Mobile Trading Demo Available Available
Mobile Trading App Zerodha Kite Sine
Android App Available Available
iOS App Available Available
Android Tablet Available Available
iPad App Available Available
Platform Features
Charges Free Free
Real-time Updates Available Available
Portfolio Details Available Available
Online MF Buying Available Available
Research Reports Available Available
Easy Installations Available Available
Global Indices Available Available
Live Markets Available Available
SMS/Email Alerts Available Available
Multiple Account Management Available Available

Conclusion

Both Zerodha and Trade Smart is better for online traders and investors. I hope that this comparison (Zerodha Vs Trade Smart Online) will prove to be a complete help.

The stock market or share market of a country plays a major role in shaping the economic stature of the country. Companies and individuals (investors) can offer stock shares and other such assets for raising more money through the share market.

One can understand the economy of a country by scrutiny of its stock market. The stock market deals with two main categories of people: Investors and Brokers or Share-brokers.

The latter is of two types: Full-service brokers and Discount brokers. In this article, we are going to talk about this second type of brokers. Discount stock brokers as the name suggests provides various trading services like executing your buy and sell orders on the market, providing margins or leverage on your capital invested and many more at a discounted rate.

This means that while working with a discount broker, your charges or fees towards these brokers are much lesser in comparison with Full-service brokers.

However, keep in mind that just as they charge less from you, the services or products they offer also varies less than what full-service brokers provide. For example, discount brokers do not provide any market research report or study like their counterparts.

Let us move on keeping these things in mind. However, since they offer a discounted rate, more and more people are inclining towards these discount brokers for conducting their businesses in the stock market. As such more and more discount brokers are popping up in the market.