SELECTING A BROKER

Up to Investing Basics Q&A

Posted by N Sood at December 07. 2012
This is probably not the right place for this , but since it is an important part of investing and affects returns, I am starting this post here - soliciting
opinions on the best online broker to go with. This might also lead us to buy that stock as well ! I think it's time to look at brokerage stocks - their cycle is
turning and some of them have already moved. Retail participation is at an all time low so I'd guess one cant get them any cheaper.
I have an account with icici direct. I think they are the priciest in the market , maybe the oldest and the largest as well but am not sure if they are the best as well or
it's just a case of people avoiding the shift. They seem to have two plans and you're stuck with 0.55% brokerage unless you're a heavy trader . What they dont tell you
and people might be interested to know is that they also have prepaid brokerage plans which reduce your brokerage to 0.35% or even lower if you pay them upfront
brokerage. This is offered if you complain!
They have a nice feature of calculating your annual returns so during your self appraisal, you get a clear picture of how you're doing ! It's not for F&O though.
Otherwise, I think they have everything you need for your investing which makes them a convenient one stop shop. But if others also offer all the options and charge
you much less, why not make the shift. And I do not think ICICI advisory services are anything to speak of.
I asked an icici guy why should I continue with him when others such as kotak charge lesser brokerage and their s/b interest is also higher. He tried to tell me that
others have hidden charges which show up only when you trade. ICICI's 0.55% brokerage adds up to 0.70% if you add all the charges. Not sure how the others stack
up.

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Posted by Abhishek Basumallick at December 08. 2012
I have accounts with HDFC Securities, Kotak and Sharekhan and all three are good. Although in terms of ease of use, I prefer Sharekhan. Brokerage is more
or less the same for all three. I don't fret a lot about it simply because I am not a regular "trader" so it is not worth the headache to minutely dissect the
0.05%-0.10% differences.

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Posted by Raj Nair at December 09. 2012
I have accounts with HDFC Securities and zerodha. Since most of my stock investments are long-term, the trade frequencies are comparatively low, and I
use HDFC Securities for this purpose. The brokerage charge is around 0.5%.
I use zerodha account primarily for my Options trading. They offer a flat rate of Rs. 20/- per trade.

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Posted by Jagbir Singh at December 10. 2012
I'm with ICICIDirect and satisfied with their services. They are indeed most expensive and I am also in search of cheaper one with comparable features but
as of now I am not able to find any. I guess the mainstream brokerage houses like HDFC/Sharekhan/Kotak/IIFL etc. are more of less same with minor
difference (bit cheaper compared to icicidirect) unless you have big portfolio and in position to bargain with them hard. I don't think its worth a change if
diff is not much as from user interface, features and seamless point of view, I find icicidirect superior to many. One major factor for me to not hurry for change is
that I'm kinda buy and hold person with very few transactions and small portfolio, so even bit high brokerage don't bother me much.
I checked their prepaid plans, and after some bargaining with my RM there, they are ready to offer me one but I don't find them appealing. Prepaid plan make sense
only when your transaction value is high, for example, to make sense with their 25k prepaid plan, you should do transactions worth 15 lacs or more in a year. (refer
relevant article inlivemint).
As far as smaller player concerned, they surely offer very cheap brokerage but their services/interface sucks sometimes. I have opened one trading a/c with Ventura
securities with brokerage around .20 (or .25 don't remember exactly) but their software was headache to operate and within month or two, I closed the account.

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Posted by Hitesh Patel at December 10. 2012
I have accounts with icicidirect, smc and prabhudas liladhar.
Most satisfied with services and brokerage rates and honesty of PL people.
icicidirect brokerages are high but I put most of my long term investments in that account so that i am not too worried about brokerage charges.

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Posted by Rudra Shankar Chowdhury at December 10. 2012
I have accounts with ICICI, HDFC and Edelweiss.
ICICI and HDFC are good for buy and hold guys, specially the GTC order in ICICI where your limit buy order remains active for next 30 days is awesome.
Also ICICI Direct is the most technically superior account. Anything from OFS to NCDs are readily tradable there. Their research is pathetic though.
Edelweiss I choose mostly for research which is top notch and they do not follow the herd and is independent research on large group of small and midcaps. Their
prepaid plans are pretty good and interface very professional. Suits a trader/investor.

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Posted by Raj Panda at December 12. 2012
I use icici direct and emkay (through fundsindia). Very happy with Fundsindia platfrom and brokerage charges which are "Rs. 25 or 30 basis points (i.e. 30
paisa on every Rs 100 charged), whichever is higher".
However the problem is, they don't support BSE listed shares as of today and that's the reason i still retain my icici a/c. And that's a big problem considering
the kind of shares that we discuss here, like Atul Auto, Mayur(until recently), Hawkins are all listed only in BSE.
Fundsindia have been talking of including BSE listed shares on their platform for almost 6 months now, but no signs of it happening. If it does, then it will be a good
platform.
Also, some seniors have been advocating me to switch to a brokerage which has it's own bank like HDFC, ICICI, Kotak. Am thinking of switching to HDFC Securities
myself.. The fat finger fiasco which happened few days ago with Emkay has already given me a scare...

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Posted by Raja Janakiraman at December 16. 2012
I have trading accounts with HSBC (as I also bank with them thereby having some degree of control over my excess funds) and Edelweiss. I find 2 brokerage
accounts very helpful when rolling over derivatives trades.
As Rudra mentioned, Edelweiss gives you full access to their institutional research platform and has a very robust trading interface for equities, MFSS,
derivatives, FX and commodities. It also has enough basic features (for technical analysis) that do the job and I would seriously recommend them for someone who
has multiple asset class exposure.
Trading costs do depend on your volume though there are no hidden costs that I've faced, with both HSBC and Edelweiss. They charge me 20 and 12 bps respectively,
ex DP charges.

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Posted by N Sood at December 17. 2012
I also started this thread to possibly identify a good brokerage / financial services stock to get into. I would consider them to be like cyclicals as well and
good times may be coming. Most stocks are nearing highs already except emkay which is at lows - not sure if that's a good buying opportunity.Then I
wonder if the financial analyst community would ever leave 'one of theirs' undervalued.
Edelweiss looks to have a very neat and powerful brokerage platform. Not sure what their reach is.

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Posted by Ashwin at June 24. 2014
Hi,
I trade with Religare and I find the service, interface is good but brokerage is high. I end up paying around 0.9% for every trade. For phone trading it is Rs
10/share (max of Rs 50) plus 0.9%. There is a AMC cost also. How does compare to what you pay as brokerage?

I'm not a trader, not interested in in house research, fancy trading platforms and bells & whistles. Can some suggest some good and competitive broker for
online/phone trading?

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Posted by Gaurav Chandak at June 24. 2014
HI friends ,

I am Writing this post with intention of advertisement.

I am sub-broker of sushil financial services. I can provide you brokerage of .2% on Del and if any one trader then u can get.001% for intraday.


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Payment cycle is T+5

Las available without any problem.

I can assure u a best service from my end.

You can Contract me @ gaurav12123@gmai.com or 9422940740.

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Posted by SAMIR SHAH at June 24. 2014
Dear Ashwin
I have recently (since around 3-4 months) started trading with sasonline.in. Brokerage is Rs. 9 (or 0.01%, whichever is lower) per exectuted order, no
matter how large the order. This is across all segments, i.e. options, futures, cash and bonds. I have not availed it, but there is also a Rs.999 per month
flat option for those who engage in more thana 100 trades a month. I was earlier dealing with HDFC securities (0.25% for delivery), and clearly, this is much
cheaper.
You can also call and trade, but I think the charges for this are higher. I have never done this.
Payin is through the Atom Payment Platform(Rs. 10 charge) or NEFT to their HDFC bank account (Free). Payout requestedbefore 5.30 p.m. gets credited to an HDFC
bank account on the same day, while for other banks, it gets credited the next day. Since you have to request payout, you need to be a little alert to do so, since it is
not tied to your bank account like ICICIDIRECT or HDFC securities.
They also automatically take the shares in your demat account, and provide you collateral for margin trades, if this is interesting for you.
The trading platform is the NOW (NSE Online), which has a desktop, web and mobile version. The software is not as refined as ICICIDIRECT, but is more powerful.
So far, their customer service has also been excellent. I would recommend them.
Regards
Samir

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Posted by SAMIR SHAH at June 24. 2014
Dear Ashwin
I have recently (since around 3-4 months) started trading with sasonline.in. Brokerage is Rs. 9 (or 0.01%, whichever is lower) per exectuted order, no
matter how large the order. This is across all segments, i.e. options, futures, cash and bonds. I have not availed it, but there is also a Rs.999 per month
flat option for those who engage in more thana 100 trades a month. I was earlier dealing with HDFC securities (0.25% for delivery), and clearly, this is much
cheaper.
You can also call and trade, but I think the charges for this are higher. I have never done this.
Payin is through the Atom Payment Platform(Rs. 10 charge) or NEFT to their HDFC bank account (Free). Payout requestedbefore 5.30 p.m. gets credited to an HDFC
bank account on the same day, while for other banks, it gets credited the next day. Since you have to request payout, you need to be a little alert to do so, since it is
not tied to your bank account like ICICIDIRECT or HDFC securities.
They also automatically take the shares in your demat account, and provide you collateral for margin trades, if this is interesting for you.
The trading platform is the NOW (NSE Online), which has a desktop, web and mobile version. The software is not as refined as ICICIDIRECT, but is more powerful.
So far, their customer service has also been excellent. I would recommend them.
Regards
Samir

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Posted by Ashwin at June 24. 2014
Hi Sameer,

I checked HDFC sec it is showing 0.5% brokerage along with STT, Service Tax, NSE Turnover and Transaction Charges, SEBI charges will come around
0.75%. You mentioned only 0.25%?
I spoke with SAS people and it is definitely cheaper than Religare. We can't place order before market hours in web platform, Good till cancelled not
available (only intra day orders) and no demat account (would it be difficult to sell/buy and get the thing transferred to my demat)? They scheduled a demo and lets
see how it goes.
Thanks for the heads up.

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Posted by SAMIR SHAH at June 25. 2014
Ashwin
You are right, the card rate for HDFC securities is higher. But it is negotiable. I negotiated a special rate through my HDFC Bank RM. Obviously, STT,
Service Tax, etc, are extra for any broker.
With Sasonline, you can specify any existing depository of yours for your demat account. You can also open a demat account with them. But to sell shares in your
existing demat account, you need to senda request to your DP transferring the shares to your client beneficiary account as SAS. Basket and ordinary orders before
market hours are available only in the desktop version, and yeah, it would be nice to have a GTC facility, but that is not available.
There is another online brokerage, Zerodha, which gets good reviews. I have not tried them, they charge 20 Rs. (vs. Rs.9 for sas). Maybe you can overcome some of
these issues with them.
Glad to be of help.
Regards
Samir

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Posted by Ashwin at June 25. 2014
@ Sameer,
I run a Mac OS X and I don't want to have hassles of installing a desktop version. For buying can I just buy and it will go to the existing Demat a/c, right?
For selling I can't just arbitrarily sell and in advance I've to transfer the shares to client beneficiary account? Can I sell today and transfer the shares
tomorrow?
I will be interested in HDFC 3 in 1 account if I get 0.25-0.3% brokerage. There is one HDFC Bank opposite our office. How to negotiate a better rate? I don't have a
bank account with them since they require us to maintain Rs 10k balance for standard SB Account. I'm planning to speak with Zerodha too and see how it goes. They
too charge 0.1% or Rs 20 (lower of the two vs 0.1% or Rs 9 of SAS). My trading volumes are not high and I'm OK with Zerodha if they GTC, pre market order placing
and own demat service. OK with HDFC if they give 0.3% or less for their 3 in 1 account.
Please tell me know. Thanks in advance.

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Posted by SAMIR SHAH at June 26. 2014
Frankly, if you don't use a windows OS, then I would not recommend Sasonline. The web version is simply not absolutely upto speed (Though, maybe still
better than the HDFC sec). Shares which you purchase on sasonline, can be sold through sasonline seamlessly. It is only shares lying currently in your DP that
you need to go through the transfer process.
As far as HDFC is concerned, why don't you just walk in and ask the Branch Manager? I had an account with them, with a RM assigned, so it was easier. Even Kotak
offers a 3-in-1 account, and even they negotiated down to 0.25%. I also did this through my RM.
Ultimately, I switched from both, because SAS was way cheaper, and the software more powerful. But if your volumes are small, I guess it does not matter, though
the nearly 1% or so Icicidirect charges (they have by far the most refined web and mobile platforms, though), is just too much.
Regards
Samir

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Posted by Ashwin at June 26. 2014
Thanks Sameer. HDFC Bank insist on Rs 10k balance and I spoke over phone to HDFC Sec. No way they are willing to negotiate on brokerage. Will try going
to branch and speaking. They are very adamant and only when I spoke about basic a/c (both saving as well as demat) they got to their senses. Good anyway

since I own HDFC Bank as well as HDFC and got a taste of how hard they try for cheap source of CASA funds.
Another thing is Religare (0.6% brokerage) gives time to transfer fund (T+5) so I don't need to transfer funds in advance to trade. SASonline asks to have balance in
account before trading, right. Considering these facts and my low volume trading as forever holder to securities, I think Religare is OK or Kotak/HDFC if they offer a
3 in 1 account at good brokerage.

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Posted by vaibhav at June 26. 2014
I have Geojit. Use it on Windows XP SP2 . The http based platform is also decent.
0.3% brokerage + taxes. Annual maintenance charges are 350/-.

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Posted by Aksh at July 02. 2014
I'm having 3 in 1 account with IDBI Capital which is linked with my IDBI Bank Account so fund transfer is easy...they charge 0.5% brokerage for delivery
(min. 25 Rs. per transaction) with statutory charge extra...which I think is a bit on higher side. They offer a web platform for online trading which is not
upto the mark and suffers heavily from overloading...you won't be able to log into it just when you need it the most and suffers from many other issues like
session expires even when you are active on the windows etc...Customer service is also not upto the mark.

I immediately want to switch to some better brokerage house with better brokerage charges and bug free trading platform which can be handy in opportunistic
buying/selling for delivery in scattered manner. I think it's a very nice feature to have GTC feature.

Based on Samir's input, I've asked for a demo from SASonline guys...let's see how it goes. Need to understand more as to how they link up demat and bank acc.

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Posted by Ashwin at July 02. 2014
@ Aksh,
SASonline does not have GTC feature and one needs balance to place orders. I'm not considering it now.

@ Samir,
I spoke to ICICI Direct and they agreed for 0.3% brokerage for delivery with a privilege account (don't know what it does). Should I go for it? I like the GTC feature,
good interface, free phone trading, etc. I was put off by maintaining minimum balance. Do I need to have funds in my bank account before placing order? Religare
gives me T+7 days to settle payment. This is important as I may redeem units from my MF holdings (2 times my equity portfolio) and it takes T+3 days for payment.
Also I spoke with Geojit. They agreed for 0.25% (0.2% from 4th month) but issue is I've to place order in BTST mode to have differed payment of T+5. The branch
head started giving me "tips" though I told him I was not interested in tips or stock picks. Not sure if I can trust them.

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Posted by Excel Monkey at July 02. 2014
Guys any opinion on Reliance Securities?
Commission seems very low charging only 0.20% to 0.10% for delivery transactions depending on your volumes

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Posted by SAMIR SHAH at July 02. 2014
@ashwin 0.3% with Icici direct is very good. Of all the online services I have tried, it is easily the most refined. However, you do need to allocate money in
your bank account before any delivery trade. This means that while it still gathers interest till the payin, you cannot use the money. Also, these guys like
float. For example, if you trade derivatives, if you need to pay MTM margin in the evening, but if you have MTM margin in your favour, you only get it in
the morning. Effectively, they get free float.

I am really surprised that Religare allows T+7 to settle payment, For one, the exchange is on T+1, so in effect the broker is funding you!!. Also, they run great risk.
If you don't pay on T+7, and in those 7 days if the value of your purchases have fallen, they become liable for the difference, Pls check as to what the catch is here,
Do they take some collateral or deposit in advance?
@aksh, the way the bank account works with sasonline is as follows. You need to transfer the money to your broking account at sasonline through NEFT. They allow
you to keep trading till your balance (100% deduction for cash and carry, and appropriate margin for margin trades and derivatives) is above zero. For margin trades,
they also automatically give you around 50% collateral value for the stocks lying in your beneficiary account.
You can transfer money to your broking account by NEFT transfer from your designated bank account, or through Atom, which is an online payments service. Atom
charges ten rupees per transfer. My banks don't charge me for neft transfers.

After you finish trading for the day, you can request for a payout for the excess money in your account(including credit from sales). Pay out requests upto 5.30 pm
into Hdfc bank accounts are credited the same day. If you use another bank, you get credit the next day. So with an HDFC bank account you get the float. With other
banks, they get the float.
This process is simple and reliable, though a little crafty(you need to log on to their back office).
The stocks you purchase with Sasonline lie in your client beneficiary account. You can sell them directly through sasonline. If you wish to transfer them to your linked
demat account, you need to log on to the back office, and request transfer. It takes two days for the stocks to get credited to your demat account from your client
beneficiary account. As such,you could just keep them in your client beneficiary account, but I transfer the shares I intend to keep for a relatively long time (i.e.
more than 6 months) to my demat account. Just safer that the broker does not have access to them.
If you want to sell shares in your demat account, you need to send a slip to your DP mentioning that you want to transfer shares from your DP to your client
beneficiary account. If you have a demat account =with sasonline, the process is simpler I guess. But my DP is HDFC, and so I need to send a slip with the shares and
quantities to my bank. In my case, the RM comes along and picks it up. But I still have to call her. So I simply keep the shares I am likely to sell in my client
beneficiary account. This makes the process simpler.

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Posted by Aksh at July 03. 2014
@Samir,
Thanks, your detailed reply really helps. I think It's a good idea to have multiple trading accounts, the one with low brokerage can be used for short term
trading activities for large volumes orders. I also feel and agree with you to have some de-link up of broking/trading account and demat account. I had had
some bad experiences with IDBI Capital wherein they have executed my single order multiple times because of some issues with their online trading system and they
have no clue about it...they don't have proper checks and balance in place.
@Ashwin,
If ICICIDirect is offering 0.3% for delivery, It's good offer as they offer GTC as well which can be really useful, so let me ask for the same bargain from them as I'm
having privilege acc with them (You get better service with privilege
). It surprises me as well that you are able to carry out transaction without funds in your
trading acc and you get 7 days to settle it. Are you sure there isn't any catch? Let me check with IDBI guys tomorrow.

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Posted by Ashwin at July 03. 2014
@ Aksh, Samir,
Religare charges me 0.6% for brokerage which is definitely on the higher side and they aren't willing to negotiate down. The catch (as far I saw for the past
year) is that you can place orders only upto 100% value of our existing holdings. For eg, the MTM value of my stocks is Rs 100,000, then I can place orders
only upto Rs 100,000. Also from T+5, I can't place orders and on T+7 they will square off positions with 21% interest from day one. Other catches are their trading
software costs Rs 999/year and phone trading costs Rs 10/share plus 0.6% brokerage plus other taxes. There is no collateral or upfront deposit that I've offered. I
shall ask again my broker if there is any catch that I'm not aware of. I'm happy with Religare but for the 0.6% charge.
@ Samir,
So with ICICI, I need to have Rs 20k in account to place orders upto Rs 20K, right? Is it automatic or should I instruct that this portion of my balance is allocated for
trading. So there is no way that I can make payment after the order is executed? For eg, can I place orders of 100 shares of ITC @ Rs 305 without balance and if the
order gets executed, then I make payment that day or by the next day? If not I'm incurring opportunity loss as for a GTC order of say Rs 40k, I always need to
maintain balance of Rs 40k always and I could've parked this funds with a liquid fund earning me 9% interest.
@Aksh,
What service/features do I get with a privilege account?

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Posted by Aksh at July 03. 2014
@Ashwin
OK...So Religare provides you credit against your holdings at 21% interest rate...in that case what if let's say...you have bought stock A on T for Rs.
1,00,000 against your holdings of stock B...in between T+7, that is, before your orders gets settled, price of stock B as well as Stock A, declines by 75% and
you refuse to pay for the settlement...how does Religare recover the settlement money? Are you sure they don't keep any margin like credit of 80% of your
holdings...and don't they charge you 21% interest from the day you place an order whether it's executed or not?
Nothing special but ICICI keeps privilege desks at their branches wherein you'll get priority over ordinary customers and your request will be promptly served...As I've
this Acc for a long time, It's been converted to Privilege one.

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Posted by SAMIR SHAH at July 03. 2014
@ashwin

OK, so religare in effect uses your existing securities as collateral. The disadvantage is of course, that you can't sell these in a hurry, but I guess that is ok.
Exactly the same system is followed by Kotak Securities too, in a 3 in 1 account. I could negotiate them down to 0.25% too. They also have a web, desktop and
mobile version, though the the web version is no way as nice as ICICI DIRECT.


Your understanding of the ICICI system is correct. On your GTC orders, the money is blocked before the order is executed. It still earns the 3.5% on your savings
account. You cannot place an order on HDFC Securities or ICICI Direct without having the full cash margin (for Delivery trades it is 100% of the order value) required
for the order blocked in your bank account.

Regards
Samir

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Posted by Ashwin at July 03. 2014
@ Aksh,
@21% interest is charged only when I don't settle payment by T+7. Otherwise there is no interest. It is immaterial what happens to other stocks after the
order is executed. I normally make payment within T+4/5 so didn't had to face those scenarios yet. I've to make payment for the stocks I bought plus costs
and it does not matter what happens to other stocks in my holdings even 75% drop should not matter as long as I make payment within 7 days. There is no other
charge.

@ Samir,
I asked Kotak too. They aren't willing to negotiate. 0.49% brokerage unless I pay upfront margin of Rs 100k or more. Declined as I will incur opportunity cost. No
point in ICICI too as 0.6% is better than having to give away float when I can invest it. As you have said, I've no issues to sell what I've bought yesterday as I don't
sell. Only buying happens. Thanks for the patient answers to my silly queries.

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Posted by N Sood at July 03. 2014
icici has prepaid brokerage plans - where they take money upfront and refund you when you trade. Posting table below. Hope it shows up properly

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Brokerage Charges
Prepaid Plan Total amount with Cash Margin Futures Options - (Per Lot)

( )
service tax( )
%
%
%
( )

Posted by Excel Monkey at July 03. 2014

Same for Reliance but with a lot less commitment and better rates

Previously N Sood wrote:

icici has prepaid brokerage plans - where they take money upfront and
refund you when you trade. Posting table below. Hope it shows up
properly

10,000.00

11,236.00 0.45

0.04

0.04

70

25,000.00

28,090.00 0.35

0.035

0.035

55

50,000.00

56,180.00

0.3

0.03

0.03

45

75,000.00

84,270.00 0.25

0.025

0.025

35

100,000.00

112,360.00

0.2

0.02

0.02

25

200,000.00

224,720.00 0.15

0.015

0.015

20

300,000.00

337,080.00 0.12

0.012

0.012

15

Brokerage Charges

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Prepaid Plan Total amount with Cash Margin Futures Options - (Per Lot)
( )
service tax( )
%
%
%
( )
10,000.00

11,236.00 0.45

0.04

0.04

70

25,000.00

28,090.00 0.35

0.035

0.035

55

50,000.00

56,180.00

0.3

0.03

0.03

45

75,000.00

84,270.00 0.25

0.025

0.025

35

100,000.00

112,360.00

0.2

0.02

0.02

25

200,000.00

224,720.00 0.15

0.015

0.015

20

300,000.00

337,080.00 0.12

0.012

0.012

15