Zerodha

Overview

Zerodha is an Indian financial service company, member of NSE, BSE, MCX, MCX-SX that offers retail and institutional broking, currencies and commodities trading, mutual funds, and bonds. Founded in 2010, it is known for its discount pricing model and innovative use of technology. The company claims to be “India's first discount brokerage” having debuted the “discount broking” model in India that is popular in developed markets. The chain reaction started by Zerodha's technology and pricing models has shaped the Indian broking industry into its current form.

Regulatory Information:

Zerodha is regulated by the Securities and Exchange Board of India (SEBI). It is a member of the National Stock Exchange of India (NSE), the Bombay Stock Exchange (BSE), the Multi Commodity Exchange of India (MCX), and the Metropolitan Stock Exchange of India (MCX-SX). [^2^]

Trading Products:

Equity: You can trade in stocks listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Derivatives: Zerodha allows trading in Futures and Options (F&O) on NSE and BSE. These are financial instruments that derive their value from an underlying asset like a stock, index, or currency.

Currency: You can trade in currency derivatives on NSE and BSE.

Commodities: Zerodha offers commodity trading on the Multi Commodity Exchange (MCX).

Mutual Funds: Zerodha's platform, Coin, allows you to invest in mutual funds directly from asset management companies.

Bonds and Government Securities: You can invest in tax-free bonds, government securities, and other corporate bonds through Zerodha.

Account Types:

Equity & Derivatives Trading Account: This account allows you to trade in stocks, futures, and options on NSE and BSE. There are no annual maintenance charges for this account.

Demat Account: This is where you keep stocks in electronic format. It's needed if you intend to take delivery of stocks (buy and hold stocks overnight). The annual maintenance charge (AMC) for a Demat account at Zerodha is Rs.300.

Commodity Trading Account: This account allows you to trade in commodities on MCX. There are no annual maintenance charges for this account.

NRI Account: Zerodha also offers accounts for Non-Resident Indians (NRIs). The documents required and the process to open an NRI account are different from resident accounts.

Remember, you only need to open a “Trading Account” if you intend to trade only Futures & Options and/or Currencies. A “Trading and Demat” account is needed if you intend to take delivery of Stocks along with trading in Futures & Options and/or Currencies. A “Commodity Trading Account” is needed if you intend to trade only Commodities

Fund Transfer:

Zerodha offers multiple ways to transfer funds to your trading account:

UPI: You can transfer funds instantly from the registered bank account using UPI for free. All UPI transfers must be initiated from Kite.

Instant payment gateway: Funds can be transferred instantly through net banking. A charge of Rs.9 + 18% GST is applicable for such transfers.

IMPS/NEFT/RTGS transfer: You can add Zerodha's bank account details as payees to transfer funds to your Zerodha account.

Cheque: You can also deposit funds via cheque.

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Account Opening Process:

You can open an account online by visiting the Zerodha website and clicking on the “Sign Up” button.

You will need to provide your mobile number and email address to start the process.

You will then be asked to provide your PAN number and date of birth.

You will need to pay the account opening fees. As of my last update in 2021, the charges are ₹200 for a trading and Demat account and ₹100 for a commodity account.

You will then need to complete your KYC details and upload the necessary documents, including your PAN, address proof, and a cancelled cheque.

Once your application is submitted and the documents are verified, your account will be opened. You will receive a welcome email with your login details.

Leverage

Zerodha provides up to 5 times (20% margin) leverage for intraday using Margin intraday square off (MIS) and Cover Order (CO) for equity. This means that with ₹1 lakh, stocks can be bought or sold for intraday up to ₹5 lakhs. However, the list of stocks and the leverage provided can change based on Zerodha's policy.

It's important to note that due to peak margin rules by SEBI, there is no leverage offered for equity F&O, currency, and commodities segments. Peak margin regulation was introduced in 2020 to ensure that brokers dont take large risks by providing higher margins or leverage to the customer. Today all the brokerage firms in India can offer the same maximum intraday leverage.

The list of stocks allowed to trade with leverage can be checked on Zerodhas margin calculator.

Trading costs:

Equity Delivery: All equity delivery investments are free, with ₹0 brokerage.

Intraday and F&O Trades: Flat ₹20 or 0.03% (whichever is lower) per executed order on intraday trades across equity, currency, and commodity trades. Flat ₹20 on all option trades.

Direct Mutual Funds: All direct mutual fund investments are free, with ₹0 commissions & DP charges.

Other Charges: There are various other charges including STT/CTT, transaction charges, GST, SEBI charges, and stamp charges. The exact amount depends on the type of trade (equity, currency, commodity) and the specific transaction details.

Call & Trade: Additional charges of ₹50 per order for orders placed through a dealer at Zerodha including auto square off orders.

Account with Debit Balance: If the account is in debit balance, any order placed will be charged ₹40 per executed order instead of ₹20 per executed order.

DP (Depository participant) charges: ₹13.5 + GST per scrip (irrespective of quantity), on the day, is debited from the trading account when stocks are sold. This is charged by the depository (CDSL) and depository participant (Zerodha).

Pledging Charges: ₹30 + GST per pledge request.

AMC (Account maintenance charges): ₹300/year + GST charged quarterly (90 days).

Off-market Transfer Charges: ₹25 or 0.03% of the transfer value (whichever is higher).

Payment Gateway Charges: ₹9 + GST (Not levied on transfers done via UPI).

Delayed Payment Charges: Interest is levied at 18% a year or 0.05% per day on the debit balance in your trading account.

Other Trading Costs:

Zerodha charges a flat fee of ₹20 or 0.03% (whichever is lower) per executed order for all segments (except equity delivery trades, which are free).

They also charge standard regulatory fees like STT, transaction charges, GST, SEBI charges, and stamp duty2.

Please note that these charges are as of the time of the search and may vary. For the most accurate and up-to-date information, please visit the official Zerodha website1.

Trading Platform:

Zerodha provides a web-based trading platform called Kite which is known for its simplicity and ease of use. It also offers advanced charting, extensive market data, and free historical data.

They also have a desktop-based trading platform called Pi which offers advanced charting, algos, strategies, and backtesting.

Zerodha also offers a mobile version of the Kite platform for trading on the go

Deposits and Withdrawals:

Zerodha offers multiple ways to deposit funds into your trading account including UPI, IMPS/NEFT/RTGS, and the instant payment gateway.

For withdrawals, you can place a withdrawal request from the Zerodha Console or Kite. The funds are typically credited to your bank account within 24 hours if the request is placed before the cut-off time. If the request is placed after the cut-off time, it takes an additional working day for the funds to be credited to your bank account.

Customer Service:

Zerodha offers customer support through multiple channels including email, phone, and ticket-based support. They also have a comprehensive support portal that covers a wide range of topics and questions that customers might have. The support portal is categorized into different sections such as Kite (their trading platform), Console (their backoffice), Coin (their mutual fund investment platform), and Varsity (their educational platform). Each section has a list of frequently asked questions and detailed articles on various topics. They also have a 'New to Zerodha' section for new customers to help them get started with their services.

Educational Resources:

Zerodha provides a comprehensive educational platform called Varsity. Varsity is an extensive and in-depth resource for learning about the stock market, trading, and investing. It is divided into several modules, each focusing on a different aspect of trading and investing. These modules include topics like introduction to stock markets, technical analysis, fundamental analysis, futures trading, options theory for professional trading, option strategies, markets and taxation, personal finance, and risk management & trading psychology. Each module is further divided into chapters providing detailed information on specific topics.

Summary

Zerodha is a discount brokerage firm based in India, established in 2010 by Nithin Kamath and Nikhil Kamath. The company introduced a flat fee model in the Indian brokerage industry, where a maximum of ₹20 is charged per executed order, irrespective of the trade size.

Zerodha provides a variety of services including equity trading, derivatives trading, currency trading, and commodity trading. They also offer a platform for mutual funds and IPO investments. The company is registered with the Securities and Exchange Board of India (SEBI) and is a member of the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), the Multi Commodity Exchange (MCX), and the National Commodity & Derivatives Exchange (NCDEX).

The trading platform provided by Zerodha, known as Kite, is available as a web platform and a mobile application. They also offer Coin, a platform for direct mutual fund investments, and Console, a dashboard for trade and reporting.

Zerodha also provides an educational platform, Varsity, for learning about the stock market, trading, and investing, covering a range of topics from basic to advanced trading concepts.

Customer service at Zerodha is accessible through multiple channels including email, phone, and ticket-based support. They also have a detailed FAQ section on their website to address common queries.

Frequently Asked Questions:

Q: What is the total number of customers Zerodha has and at what speed is its customer base growing？

A: Zerodha has over 25 lakh active customers and a total of 60+ lakh customers. The company is adding over 2 lakh new customers every month. Zerodha is the largest and fastest-growing stock broker in India.

Q: How is Zerodha as a broker？ How safe are they？ Are they genuine and reliable？

A: Zerodha is a discount broker offering fixed price brokerage of Rs 20 per trade. They are as credible and safe as any other broker in India. They are registered with SEBI, BSE, NSE, MCX, etc., and are regularly audited by them.

Q: What are Zerodha trading and Demat account？

A: To trade or invest in the India Stock Market, you need 3 accounts; trading, Demat, and bank account. Zerodha offers trading and Demat accounts. The Zerodha trading account is required to place buy & sell orders. The Zerodha Demat account is required to hold bought securities in electronic form.

Q: Does Zerodha have Forex trading？

A: Yes, Zerodha offers trading in forex (currency). You can trade in currency derivatives at BSE and NSE exchanges using the Zerodha trading account.

Q: Is Zerodha free？

A: Yes, Zerodha offers brokerage free equity delivery trading and Mutual Fund investment. However, brokerage for Intra-day and F&O trading is charged at Rs 20 per executed order or 0.03% whichever is lower.