For new investors looking to step foot into the stock market, choosing the right brokerage company is crucial. Brokerage companies are firms that act as the go-between an investor and the stock market.
They help investors or traders buy and sell stock and other securities. Since traders cannot individually do transitions directly on the stock market, brokerage companies are pivotal to gaining access to the financial markets.
Many factors need to be considered when choosing the right brokerage company in India. Since traders and investors need to open a demat account to start their trading journey, having a company that provides a zero brokerage demat account opening process would be ideal.
In this blog, we will look into the top 5 factors to consider when choosing the best brokerage company in India.
5 Factors to Consider When Choosing A Brokerage Company
It can be quite overwhelming to choose the right brokerage company for yourself. There are many choices available in the market. However, here are the top 5 factors that you definitely should consider.
- Fees and Commissions:
It is important to consider the cost structure of the brokerage company you want to opt for. Costs such as brokerage fees, STT or Securities Transaction Tax, transaction charges and stamp duty should be considered. A brokerage company that offers a zero brokerage demat account would help investors save more.
Acknowledging how these costs will impact your investment returns can help you make the right choice. From brokerage companies that offer a flat fee per trade to companies that charge a percentage of the trade value, investors can choose either.
- The Trading Platform:
Every trader or investor wants a trading experience that is hassle-free and does not require a lot of back and forth. This is where trading platforms come into play. A trader’s trading experience will depend on the speed, user-friendliness and features offered by a brokerage company’s training platform.
Features such as daily stock recommendations, analysis tools like scanners and Marketsmith and easy application processes help investors tremendously. A platform that is intuitive and easy to navigate through will always pull more investors in when compared to others.
- Account Minimums:
Investors must consider the minimum balance requirements that certain brokerage companies have set. This factor is important as it directly ties to an investor’s current financial situation and goals.
Certain brokerage companies require a significant minimum deposit to open an account. This might sit well with every investor, especially if they have limited capital to invest.
- Customer Service:
Investors need to remember that it is the brokerage company that is in charge of their funds when they open a Demat account with the company. In this aspect, investors need to do their research. Each brokerage company does offer customer service, but not all of them might suit an investor’s needs.
A good brokerage platform should provide investors with a responsive and knowledgeable customer experience that can be accessed from multiple platforms like websites and mobile applications.
Brokerage companies that guide their investors with tools such as newsletters, blogs, podcasts etc., also make for some of the best platforms for both new and seasoned traders.
- Company History:
Seeing as there are many brokerage companies in the market, investors need to do their bit before choosing one. Looking into the history of the company can help one determine the integrity the company holds in the share market and reduce the chances of an investor being defrauded to a great extent.
Conclusion:
There are many brokerage companies in India for investors to choose from. This is why it is important to consider every aspect before picking one that sits well with you. Choosing the right brokerage company will add tremendously to an investor’s share market experience as well as to the profits they can make through their investments.