Unlimited Trading Plans (Fixed Monthly Plans)
Posted on 9th Jan 2015
by TopShareBrokers.com team
Need help choosing a broker?
Why to choose unlimited trading plans /Fixed Monthly trading Plan?
Let me explain it with a very simple example, a real life experience. When we go to fair with kids, buying tickets for rides leaves us with 2 choices, either pay per ride or buy a fixed price ticket for unlimited rides. In the beginning, we think pay per ride is better option as we are not sure how many rides kids are going to do. So we usually choose pay per ride. As it goes, we pay per ride and kids though may not want to take all the rides but like to take their favorite rides again and again, we end up paying more as compared to fixed price ticket.
From above scenario, it is easy to understand that for those executing multiple trades across all segments or high-volume trader - who performs bulk trades or Penny stock trader executing frequent trades in penny stocks, Unlimited Trading zero brokerage plans per month is the best suit.
Why investors prefer NO brokerage/Zero brokerage/unlimited trading plan?
Investors may choose the flat rate brokerage option for many reasons:
- It is a low risk model.
- Budget lock - To insure against the possibility of large bills due to over consumption.
- Due to the inconvenience associated with choosing the correct plan.
- More flexibility to do higher-frequency trading.
- Reduce transaction charges and has to pay no service tax on brokerage.
Which discount brokerage pricing model suits me?
The pricing model that works for one type of investor may not work for another. It is also possible that a pricing model that suits one broker may not suit another.Selecting a perfect online discount broker depends on type of trader you are- active trader, high-volume trader or penny stock trader, short term investor or long term investor.
Top 5 brokers by monthly plans in India
What are the best unlimited trading plans available with Indian discount share brokers?
The flat monthly fee charged by discount brokers can be either in just one segment or one flat fee to trade in all segments depending from broker to broker.
Here we are providing the details of best discount online brokers with their unlimited trading plans.
ProStocks unlimited trading plans >>More
- Rs 899 Equity Plan/PM for unlimited trading in NSE Cash, NSE F&O or BSE Cash,BSE F&O segment
- Rs 499 Currency Plan for unlimited trading in currency derivatives(NSE/BSE)
- Rs 8999 Equity Plan/PY for unlimited trading in NSE Cash, NSE F&O or BSE Cash,BSE F&O segment
- Rs 4999 Currency Plan/PY for unlimited trading in currency derivatives(NSE/BSE)
- Free 2 months unlimited trading with Yearly Plan
- Lowest Transaction Charges with NO PCM FEE
SAS Online's unlimited trading plans >>More
- Rs 999 Equity Plan for unlimited trading in NSE Cash, BSE Cash and NSE F & O segment
- Rs 499 Currency Plan for unlimited trading in currency derivatives.
- Rs 999 MCX Plan for unlimited trading in commodities
Trade Smart Online unlimited trading plans >>More
- NSE Cash, BSE Cash and NSE F&O @ Rs 3999 per month.
- Currency @ Rs 1999 per month.
- Commodity @ Rs 3999 per month.
TradePlus unlimited trading plans >>More
- Tradeplus offers unlimited trading plans:
- Unlimited equity option trading @ Rs 99 per month (refundable).
- Unlimited currency future and option trading @ Rs 99 per month (refundable)
- Unlimited MCX commodity trading @ Rs 99 per month (refundable)
- Unlimited Equity Future Trading @ Rs 799 per month ( refundable)
- R K Global unlimited trading plans >>More
- India trades @ Rs 999 for unlimited trade in NSE/BSE cash market per month.
- My Value Trade's unlimited trading plans >>More
- My Value Trade's fixed monthly Rs 1000 plan offers unlimited trading in all segments like equity, derivatives, currency, and commodity.
- My Value Trade's have unique plan which offers YEARLY unlimited trade in equity, derivatives, currency, and commodity just for Rs 10,000.
How unlimited trading plan works?
As per SEBI guidelines, broker are allowed to charges brokerage only on trading, so brokers who are providing unlimited trading plan will not charge brokerage upfront. In unlimited trading plan, broker takes maximum brokerage allowed by SEBI which is 2.5% till he recover monthly/yearly plan money, and after that he will not charge any brokerage or 1 paisa brokerage for remaining of your trades.
Example: If on day-1 you have done trading of Rs 10,000 @ 2.5%, your brokerage will be Rs 250. If you have Rs 899 Monthly plan, broker is going to charge 250 as brokerage. Assume on day-2 you have done trading of Rs 50,000 @ 2.5% your brokerage is Rs 1250. So you are going to be charged 899-250 =Rs 649 as your brokerage. From day 3rdonwards you are going to charge .01 Rs (1 Paisa) which is negligible as your brokerage till the calendar month end.
If I am opening an account in middle of month, do I need to pay for full month or pro-date basis?
When you join unlimited trading plan in middle of month or any day of month, you need to pay max 2.5% brokerage for your initial trade till you reach the amount of your defined plan brokerage and after that 1 paisa brokerage (which is negligible) amount. There is no prorated brokerage concept in unlimited trading plans.
If I have opted unlimited trading plan and not done any trading in calendar month, do I still need to pay my trading fee?
No, as defined in previous question, broker is allowed to charge brokerage only when you do trading, so in case of any given calendar month if you have not done any trading, you don’t have to pay any brokerage.
How Service Tax is calculated on Unlimited Trading Plan?
Client need to pay service tax on brokerage. With unlimited plan, you need to pay service tax on the amount you get charge as brokerage i.e. if you have Rs 899 per month plan, you need to pay service tax on Rs 899. As of Jan-2017, you need to pay 15% Service Tax on your brokerage.
Is there any contract and do we need to pay any early termination fee for unlimited broker plan?
With growing competition, there is no contract with any plan and no termination fee. Users can switch the plan as per their convenience. But still you have to check with the broker you choose.
Does Zerodha have unlimited trading plans?
No,Zerodha doesn't have unlimited trading plans, but zerodha support free delivery base trading.Zerodha's trading plans
Does unlimited monthly plan start and end with the calendar month?
Yes, but still you have to check with the broker you choose.
Why discount brokers offer such low fixed price plan and how they afford it?
In fixed monthly plan, brokers receive a fixed payment regardless of whether services are actually rendered. Fix pricebBrokerage revenues are predictable and timely, and thus are less risky than revenues from conventional pay per transaction methodologies that are tied to volume.
Let's take a scenario of buffet restaurants where you can eat unlimited food by paying one fixed price. You can eat as much food as you can at no additional charge. Restaurant owners may be able to do so under competitive pricing pressure that leads them to cook more food at zero marginal cost of production. Thus in a flat rate context, increasing consumption decreases the per unit price.
Same way discount brokers by cutting down their profit margin and minimize their transaction costs by restricting services like relationship management and offering online trading platform are able to offer services at such unbelievably low rates.
Switch to Discount brokers and Save up to 70% on your brokerage fees.....
Fixed price models or unlimited trading plans allow customers to pay a fixed price for services that are agreed upon by both the parties. It should help in arriving at a price that is competitive yet profitable, flexible, simple and easy to apply. It should be representative of business realities and maximize benefits for both the parties. That's why, it is essential to do due diligence of each broker offerings before deciding on the best fit pricing model for you.
SAVE 70% ON YOUR BROKERAGE