March 19, 2024
6 mins read
If you’ve ever sat down to start trading and thought, “Am I paying too much in brokerage?”, you’re not alone. I remember when I opened my first Demat and trading account — the brokerage structure looked simple at first… until I realised I was paying more than I should have.
That’s why it’s worth taking a little time to understand how brokerage works, what’s considered “low brokerage” in India, and how you can make sure you’re not burning profits on fees.
If you’re new to this, you’ll quickly see there are two broad categories:
Traditional (Full-Service) Brokers — They give you personalised advice, research reports, and handholding… but you’ll pay for it, often as a percentage of your trade value.
Discount Brokers — No frills, no advisory. Just a low, flat fee for each trade, which can be a game-changer if you trade frequently.
When I started, I went with a traditional broker for the “guidance”, but once I had a basic grip on the markets, I switched to a discount broker — and my costs dropped overnight.
Brokerage fees are what your broker charges you for executing buy and sell orders on your behalf.
Traditional brokers might charge you a percentage of your trade value.
Discount brokers usually charge a flat fee, sometimes as low as ₹20 per trade.
Here’s the thing — those ₹20 flat fees add up way slower than a percentage-based fee if you’re an active trader. Using a brokerage calculator is one of the smart things you can do. I use it before large trades just to make sure the costs make sense.
When brokers talk about “low brokerage,” they mean fees in the ₹10–₹20 range per executed order for equities, intraday, and futures trades.
If you’re an active trader, the difference between paying ₹20 per trade and 0.5% per trade is huge over time. I once ran the numbers on my own trades from a busy month — with a percentage-based fee, I’d have paid almost double what I did with a discount broker.
SEBI has rules here:
Equity delivery — Max 2.5% of the transaction value.
Intraday — Max 0.25% of the transaction value.
Many brokers don’t go anywhere near these caps now, but it’s still worth knowing. Just because they can charge up to that doesn’t mean they should — or that you should pay it.
When you look at your contract note, you’ll see multiple components.
Brokerage Fee — The core charge for the trade itself.
STT (Securities Transaction Tax) — A government tax on buying/selling securities.
GST — 18% on the brokerage fee and transaction charges.
Exchange Transaction Charges — Fees from NSE/BSE/MCX for each trade.
Stamp Duty — A state-level tax based on your transaction value.
The first time I saw all these, I was surprised at how the “small” add-ons made the bill higher than expected. Now I always check the total cost, not just the advertised brokerage.
Here’s where it gets practical for you:
Futures — Can be as low as 0.01%–0.03% of transaction value or ₹20 flat per order. Perfect if you trade large volumes.
Intraday — Also in the 0.01%–0.03% range or ₹20 flat per order. If you do multiple trades a day, the savings add up fast.
Delivery — Typically 0.1%–0.5% of transaction value. Some discount brokers even offer zero brokerage on delivery.
Options — Around ₹20 per executed order or 0.01%–0.03% of premium value. Ideal for frequent options traders.
I personally use different products depending on the market mood, but having low brokerage across all keeps my costs predictable.
Say you’re doing an intraday trade worth ₹1,00,000.
Traditional broker at 0.5% → ₹500 in brokerage.
Discount broker at ₹20 flat → ₹20 in brokerage.
That’s ₹480 saved — on just one trade. Now imagine that over 20 trades in a month.
When I was choosing my broker, I looked at:
My trading style — Active intraday traders benefit from flat fees.
Total costs — Brokerage, plus account maintenance, platform fees, and hidden charges.
Platform quality — A clunky platform can cost you more than high brokerage.
Customer support — Because when something goes wrong mid-trade, you need fast answers.
It’s tempting to choose the cheap option, but make sure the service and tools match your needs.
Understanding brokerage charges isn’t the “fun” part of trading, but it’s one of the important component. Every rupee you save on fees is a rupee that stays in your pocket — or gets reinvested.
If you’re looking to open a Demat account, don’t just look at the flashy ads. Look at the actual charges, run the numbers for your trading style, and choose a broker that fits how you trade.
I learnt that brokerage eats into profits quietly — you don’t notice until you add it all up. But once you take control of it, trading feels a lot more rewarding.
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Discount brokers offer lower brokerage fees by operating on a low-cost model that minimizes overhead expenses, allowing them to pass on the savings to traders in the form of reduced fees.
While low brokerage accounts offer competitive fees, be aware of potential hidden charges such as account maintenance fees, transaction costs, and additional service fees.
Brokerage charges directly affect overall trading costs. High brokerage fees can erode profits, especially for frequent traders, making it crucial to choose brokers with low, transparent fees.
Pros include lower trading costs and higher potential returns. Cons may include fewer value-added services and less personalized customer support.
Compare brokerage charges by analyzing the fee structures of various brokers, considering both flat-rate and percentage-based fees, and using online tools or calculators for a detailed comparison.
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