Investors all over the world invest in one or other form of security like equities or debentures. The securities are actively traded on the stock market which an investor can invest in by opening an online trading account with brokers or institutional helpers who have registered themselves with regulatory bodies of the stock market. Moreover, an investor has to hire the services of a broker or a brokerage company to invest in stock market securities. Brokers all over the world act as a middleman who charges a certain amount of fee for their services known as Brokerage. Lowest brokerage charges in India charged by brokers are very difficult to locate. Various types of brokers charge different percentages of Brokerage of the total invested outlay.
There are generally two types of brokers in India who provide their services. These are known as full-time service brokers and discount brokers. Full-time service brokers act as normal brokers who provide different services ranging from simply buying and selling stock market securities to assistance in opening an online training account. Full-time service brokers charge a percentage of the total investment outlay which can be high or exorbitant as compared to discount brokers. Their services, however, are wide-ranging including agency services, underwriting services, timely provision of market information, safekeeping of investment accounts and various others. Their brokerage rates are higher as compared to discount brokers as they provide a great many numbers of services as compared to discount brokers. Moreover, they charge a small amount of free for opening an online trading account which can vary from a broker to another full-time service broker.
Discount brokers, on the other hand, are preferred by small-cap investors who require limited services with low percent of Brokerage rates. Their Brokerage rates are very low as compared to full-time service brokers. They work on a flat fee basis that is the charge Brokerage depending upon the volume of transactions entered into by the investor With their assistance. Discount Brokers provide limited services as compared to full-time service brokers. They may assist in buying and selling of securities. However, a discount broker may not provide services like tax benefit services and real estate and commodities investment facilities, etc. Their Brokerage and margin rates are very low as compared to full-time service brokers which make them preferable and beneficial for small-cap investors who need limited services with limited brokerage rates.
A trader or institutional investor must select the best broker who can provide various types of services and assistance facilities combined with Low Brokerage rates. The advantages and disadvantages of various types of brokers must be compared to select the best broker with the lowest Brokerage charges in India. Different brokers and brokerage companies charge different percentages of broke his rates. It depends upon the trader and their investment outlay which ultimately decides which type of broker he or she wants to hire for assistance. Traders who want to invest in large-cap investments and have the ability to undertake market risk must go for full-time service brokers. However, small traders with limited funds for investment must hire discount brokers with a lower amount of Brokerage.