Posted on 9th Jan 2015
by TopShareBrokers.com team
Rated 4.5/5 based on 93 customer reviews
Let me explain it with a very simple example, a real-life experience. When we go to the 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 a 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.
Updates on Unlimited Trading Plans:
The fixed brokerage unlimited trading plans India are good for active investors, where they do average 20+ trading per day, in this case you will recover your money in 2 trading session and after that you will enjoy "zero brokerage unlimited trading" completely free. By using fixed brokerage unlimited trading plans investor can do more trade in small movemement of market. Other charges like STT, stamp duty, transaction charges, GST and so on still need to be paid by investor.
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.
Active traders make multiple trades throughout the day. They attempt to profit from the daily price fluctuation of a particular stock and usually don’t hold the securities for long term.
As frequency of trade is much higher, active trader always look for low brokerage online trading account in India. Active trader prefer strong and reliable trading platform and lowest brokerage charges for online trading. Maximum full service and discount brokers are providing online trading platform with cutting edge technologies, so competition is coming towards lowest brokerage. Discount brokers in India are providing low brokerage trading account in two ways –
For Active trader, zero brokerage unlimited trading plan is the best, where they need to pay fix monthly brokerage and get unlimited trading after minimum monthly fee.
Long Term Investor invest and hold portfolio of stocks, mutual funds, bonds and other investment instruments over an extended period of time to create wealth in long run. In long term holding you need not to pay lofty short-term capital gains taxes.
For Long Term Investor we suggest zero brokerage trading which is offered by Zerodha, Upstox where investors don’t have to pay any brokerage for equity delivery trading and invest money for long term.
You can check the best brokers in India to provide monthly plans in this article-Top 5 brokers by monthly plans in India
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.
As per SEBI guidelines, the broker is allowed to charges brokerage only on trading, so brokers who are providing unlimited trading plan will not charge brokerage upfront. In the unlimited trading plan, the broker takes maximum brokerage allowed by SEBI which is 2.5% till he recovers 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, a 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.
When you join an unlimited trading plan in the middle of the month or any day of the 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.
No, as defined in the previous question, the 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.
Client need to pay GST on brokerage. With an unlimited plan, you need to pay GST on the amount you get charged as brokerage i.e. if you have Rs 899 per month plan, you need to pay GST on Rs 899. As of July-2017, you need to pay 18% GST on your brokerage.
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.
No,Zerodha doesn't have unlimited trading plans, but zerodha support free delivery base trading.Zerodha's trading plans
Yes, but still you have to check with the broker you choose.