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What is the difference between discount brokers and flat fee brokers?

Flat fee brokers and discount brokers both come under the same category – low fee brokers. They both have fix maximum brokerage. Flat fee brokers charge fix brokerage irrespective of quantity. 5paisa- Rs 10 flat fee, Prostocks – Rs 15 flat fee and so on. In flat fee, if you buy 1 share or 1,00,000 shares – broker will charge you the fix brokerage. Where discount brokers like Zerodha,Upstox, SAMCO have both % and maximum brokerage. Zerodha and Upstox charge .01% or Rs 20 whichever is minimum for equity intraday trades. In such case, if you buy 1 share and have brokerage less then Rs 20 then you don’t have to pay higher brokerage.

Discount brokers are worth when you are doing trades in penny stocks and don’t have huge volume. However, for high volume traders, discount brokers or flat fee broker doesn't make any big difference.

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