Which investor wouldn’t want a lower brokerage charge when investing? Low brokerage charges are a boon for investors, no matter how big, because they rightly believe that it is a valuable incentive to invest more. Yet at the same time, no one objects paying for value added services that is paid to the brokerage, particularly if it eases your investment process. So how to find that perfect low brokerage, value plus account?
For starters, you need to remember that there are multiple options to choose from, including per trade payment systems, fixed brokerage charges for every transaction and of course, prepaid brokerage plans.
These plans are often confusing for beginners in the market and making up one’s mind is often an extremely difficult task. According to market experts, prices are not just the predominant factor behind a good choice. Other factors like the nature of your trade or investments and requirements also come into play while choosing a broker payment plan. Payment for every trade is a common system and a fraction of the trade value is deducted by brokers in this regard.
Many brokers choose to charge anywhere between 0.5% for an approximate share amount, say 100 shares or even more. There is a minimum amount that is often stipulated by brokerages and this is coupled with statutory dues including service taxes, securities transactional taxes and other charges. Intraday trading usually takes place at rates of about 5 paisa for every INR 100 of trade during the day. A maximum of 2.5% is usually charged by brokerages.
When it comes to your low brokerage trading account, you might want to consider prepaid plans as well. This means that you have to fork out a lump sum amount to your brokers well in advance. However, such payments are only held valid for specified time periods and save you a lot of hassles involved in daily calculations and other expenses. Low brokerage accounts mean lower commissions or charges deducted by brokers and can be valid for both per trade and prepaid payment systems. You just have to plan things properly and do your research to land upon the best option.
Discuss your low brokerage trading account plans with an expert before taking the plunge. There are a multitude of plans offered by various brokerages. Hefty discounts are also offered by many brokerages in order to provide greater value propositions to traders or investors. The higher the value of stocks, the lower the brokerage rates and this is something that is witnessed in most cases. Take for instance that you are trading stocks worth around INR 1 crores in a single month. This will automatically give you the lowest rates like 0.1% and so on.
