All About Zerodha Accounts – Features, Rates, Benefits

The first affordable online brokerage institution of India is Zerodha. With its absurdly low costs, it completely altered the stock market and popularized the term discount broker itself. There are several accounts available on the platform that can confuse you, especially if you are a beginner in stock market. In this article, we will discuss about the different types of Zerodha Accounts, their features and prices, that will help you make wise financial decisions.

All About Zerodha Accounts – Features, Rates, Benefits

Zerodha stands out as a top-notch stock brokerage firm in the current landscape. Its remarkable online trading platform, competitive brokerage rates, and reputation for transparency position it as a leading choice for investors. Zerodha’s unwavering commitment to progress and innovation has propelled it to become the fastest growing fintech company in India.

Zerodha distinguishes itself as the foremost technologically advanced stock brokerage in India, offering a diverse array of trading software tailored to its clients’ needs. These include the user-friendly Zerodha Kite for web and mobile trading, Coin for mutual fund investments, Varsity for comprehensive investor education, and Trading Q&A, among other valuable tools. Additionally, Zerodha extends its offerings with platforms like Smallcase for thematic investments, Streak for algorithmic trading and strategy development, Sensibull for options trading, GoldenPi for bonds trading, and Ditto for insurance solutions.

In order to engage in trading activities such as stocks, commodities, or currencies, or to invest in assets like stocks and mutual funds through Zerodha, customers are required to establish both a trading account and a demat account. However, it’s important to note that a demat account is not compulsory for customers who intend to exclusively trade in derivatives.

Zerodha also provides the option of a 2-in-1 account, which combines the trading account and demat account into a single package. This integrated account facilitates seamless and automated transactions between the two accounts. While a single customer account grants access to all available market segments, it’s necessary for customers to individually activate each segment either during the initial account setup or at a later stage.

Features of Zerodha Accounts

• Leading Brokerage Firm: This broker holds the top position in terms of active client base, market trading volume, and attracting new customers.
• Unparalleled Safety and Trustworthiness: Recognized for its unmatched safety, reliability, and trustworthiness, making it a go-to-choice for investors.
• Cutting-edge Online Trading Tools: Offers the most advanced and sophisticated online trading tools to enhance the trading experience.
• Zero Brokerage Fees for Equity Delivery and Mutual Funds: No brokerage fees are charged for equity delivery and mutual fund investments, providing significant cost savings.
• Max Brokerage of Rs. 20 per Trade: Ensures a maximum brokerage fee of Rs. 20 per trade, resulting in substantial savings ranging from 60% to 90% when compared to traditional brokerage firms.
• Up to 20x Intraday Trading Leverage: Provides the opportunity for up to 20 times leverage on intraday trading, amplifying trading potential.
• Zero Commission Direct Mutual Funds: Offers commission-free access to direct mutual funds, enabling investors to maximize returns.
• Suitable for All Investor Types: Catering to a diverse range of investors, including novices, active traders, algorithmic traders, and both active and passive investors.

Types of Zerodha Accounts

When registering with Zerodha, there are three distinct account types at your disposal. To engage in trading activities, you must have both a trading account and a Demat account. Furthermore, if you wish to delve into commodity trading, a separate account is essential. The convenience lies in the fact that all of these accounts are conveniently accessible within the Zerodha ecosystem, streamlining the experience for traders by providing a unified platform. These are the three accounts offered by Zerodha:

1. Trading Account

A Zerodha Equity Trading Account empowers users to engage in trading activities spanning equity, futures & options, as well as currency segments. To initiate trading on the Zerodha platform, clients simply need to access their Zerodha account through either the Zerodha Kite web interface or the mobile application, enabling seamless online trading across various market segments.

You’ve established an equity and derivatives trading account with a stockbroker who holds trading memberships with prominent Indian stock exchanges like NSE, BSE, and MCX-SX. To initiate your trades, you deposit funds into this trading account, which you subsequently utilize to buy and sell stocks, futures, and options. The flexibility of Zerodha’s online trading accounts allows you to engage in trading activities through various platforms, including software-based, web-based, and mobile applications for trading.

However, there’s a settlement process in place that occurs on T+1 day. This means that if you realize a profit of approximately Rs. 10,000 on a given day (referred to as T Day), you can only withdraw this profit on the following day, known as T+1 day. Nevertheless, you do have the option to reinvest this profit of Rs. 10,000 on the same day (T) by opening a new position.

2. Demat Account

A Zerodha demat account is an online platform designed to securely store various financial securities like stocks, bonds, and mutual funds in electronic form. It facilitates efficient and paperless transactions for online trading, ensuring both speed and security. CDSL is the custodian responsible for managing the demat account associated with Zerodha, while Zerodha provides the necessary services to maintain and operate the account.

A Demat Account primarily serves as a secure storage facility for holding stocks. It’s important to note that if you exclusively trade in futures and options, a Demat account is not necessary, regardless of whether your trading is intraday or positional (overnight). This is because futures and options are contract-based instruments with expiration dates.

Zerodha follows a T+2 rolling settlement cycle for trading involving the delivery of shares. This means that if you buy 100 shares on day T, they will only be credited to your Demat Account on day T+2. Similarly, you can only withdraw the proceeds (Sale credit) from the sale of stocks through your Demat Account on T+2. Zerodha charges an annual maintenance fee (AMC) of Rs. 300 for a Demat account, which is billed at the end of the fiscal year. Additionally, there is an opening fee of Rs. 200 for a Demat account. It’s important to ensure that you have all the necessary documents required for opening a Zerodha account before you initiate the registration process.

3. Commodity Trading Account

Zerodha enables investors to engage in commodity trading, facilitating the buying and selling of commodities such as gold, silver, metals, oil, and agricultural products through its trading platform known as Zerodha Kite. This service is made available through Zerodha Commodities Pvt Limited, which holds membership with MCX (Multi Commodity Exchange). To participate in commodity futures and options trading with Zerodha, it is important to note that you cannot open a standalone commodity account. Instead, you must also establish an equity and general trading account with the platform.

In order to engage in commodity futures trading, you are required to make an initial deposit into your commodity trading account, similar to how you fund an equity trading account. The settlement process for both types of trading operates on a T+1 day basis. If you make a profit, you will receive it on the following day, whereas if you incur losses, they will be deducted on the same day. Opening a Zerodha commodity account incurs an initial charge of Rs. 100, and there are no annual maintenance fees associated with it.

Also read: Best Discount Brokers In India

How to Open Zerodha Account?

Now that you are aware of the types of accounts under Zerodha, let’s focus on what is Zerodha account opening procedure. To initiate online trading with Zerodha, investors are required to establish an account. For those seeking immediate access to trading and the ability to start trading on the same day, it is essential to complete and submit the online account opening form. Here are the steps for creating an online Zerodha account:

Step 1: Go to the official website of Zerodha.

Step 2: Click on the Sign Up button located on the top menu’s right-hand side.

Step 3: Enter your mobile number as prompted.

Step 4: Enter the One-Time Password (OTP) you’ve received on your mobile phone.

Step 5: You will then be prompted to provide your personal information, PAN (Permanent Account Number), and bank account details during the registration process.

Zerodha Account Opening Documents

To initiate the process of opening a Zerodha account, the following documents are required:

• A duplicate of your PAN card.
• Aadhar card (Compulsory for online account creation).
• A voided check or your most recent bank statement.
• A photograph or scanned reproduction of your signature.
• Income Proof (Required for trading in Futures and Options)
  • 6-Month Bank Statement
  • Latest Salary Slips
  • Form-16
  • Income Tax Return Acknowledgment
  • Demat Holding Statement
  • Net Worth Certificate from a Chartered Accountant (CA)

How to Transfer Fund to Zerodha Account?

Now, that you have opened your account, it is time to transfer the funds to the account. These funds will be used to buy shares and commodities from the exchange. These funds can be transferred in three different ways:

• From A Bank Account Using NEFT or RTGS: You can use the NEFT/RTGS fund transfer option from your bank’s net banking service to move money from any connected bank account (Zerodha Linked Bank Account) to your trading account.
• Using Console: Checking statements and withdrawing money from the Zerodha trading account are both possible through the Zerodha back-office Console.
• Using Zerodha Kite: Zerodha’s primary trading platform is called Kite.

Some features of transferring money to Zerodha account are:

• UPI transfers are exempt from charges.
• There is a fee of Rs. 9 per transaction for adding funds via net banking.
• No fees are incurred for withdrawals.
• Withdrawal requests submitted on business days before 8:30 PM (for equity) and 8:00 AM (for commodity) are executed on the same day.
• Funds acquired from share sales are eligible for withdrawal only after a waiting period of T+2 days.
• Funds obtained from exiting F&O positions are available for withdrawal only on the following business day.
• Pay-ins made during the day can only be withdrawn on the subsequent day.

How to Change Account on Zerodha?

Now that you know what is Zerodha account opening process, let’s see how to make modifications as and when needed. To initiate the process of opening a Zerodha account, it is essential to provide your bank account details. These details are crucial for facilitating deposits and withdrawals. If you happen to possess an existing Zerodha trading account and wish to update or modify your linked bank account, you can do so by furnishing the necessary information. The process to modify your Zerodha bank account are as follows:

Step 1: Access the Console platform on Zerodha and log in.

Step 2: Navigate to the Account section.

Step 3: Choose the Bank option.

Step 4: Click on the icon for modifying your bank account details.

Step 5: Enter the new account number and the associated IFSC code.

Step 6: Agree to the terms and conditions as provided.

Step 7: Proceed to the e-signature step and then click on Sign Now.

Step 8: Tick the checkbox, provide your Aadhaar number, and initiate the OTP (One-Time Password) request.

Step 9: Enter the OTP sent to your registered mobile number and click on Verify OTP.

A test transfer is initiated to verify the new primary bank account. In case this verification is unsuccessful, an email notification will be sent, detailing the issue, and instructing clients to proceed with the offline process.

Clients have the option to designate a joint bank account as the primary one only if the primary holder of both the bank and demat accounts is the same individual. If the primary account holders differ, please send the account modification form (in PDF format) along with bank proof to Zerodha via courier.

Zerodha Charges and Fees

Opening and maintaining an online platform account typically involves charges, in addition to various fees that may be incurred for different types of transactions as needed. The Zerodha account opening charges and other fees are listed below:

Zerodha Account Opening Charges

The cost of opening a Zerodha account online is Rs. 200, while opting for offline account opening incurs a fee of Rs. 400. Additionally, there is an annual maintenance charge (AMC) of Rs. 300 for the demat account. Creating a Zerodha commodity account involves an initial fee of Rs. 100.

Zerodha Brokerage Charges

Zerodha employs a fixed brokerage structure, wherein it levies a flat fee of Rs. 20 or 0.03% of the executed order value, whichever is less. For equity delivery trades, Zerodha does not impose any brokerage charges. Furthermore, the maximum brokerage applicable per order is capped at Rs. 20.

Zerodha Equity Charges

Zerodha offers commission-free trading for equity delivery transactions. When it comes to intraday trading, they levy a fixed fee of Rs. 20 per executed order or 0.03% of the transaction value on both the buying and selling sides, whichever is lower.

Zerodha Fee Structure

• Securities Transaction Tax (STT): STT is applied exclusively when selling securities in intraday and futures and options (F&O) trades. However, it is levied on both the buy and sell sides for equity delivery trades.
• Transaction Charges (Exchange Turnover Charges): These fees are imposed by stock exchanges for the usage of their trading platforms.
• Goods and Services Tax (GST): GST is calculated at a rate of 18% on the total brokerage cost, including SEBI charges and transaction charges.
• SEBI Charges: SEBI levies a fee of Rs. 10 per Crore as a regulatory charge.
• Stamp Duty: For equity delivery trades, a stamp duty of 0.015% is applied on the buy side, whereas for equity intraday trades, it amounts to 0.003% on the buy side.

Zerodha Hidden Charges

• If you opt for the Call and Trade service, there is an additional fee of Rs. 50 per call.
• For positions in Margin Intraday Square-Off (MIS), Bracket Orders (BO), and Cover Orders (CO) that are not closed by the customer, there is an extra charge of Rs. 50 per executed order.
• While Zerodha provides digital contract notes through email as the standard method, if you wish to receive physical copies of contract notes, you can do so at an additional cost of Rs. 20 per contract, and courier charges apply separately.
• If you choose to receive trade SMS alerts, they are available as an optional service. The cost is Re. 1 for Equity, Futures & Options (F&O), and Currency trade alerts, and Rs. 0.50 for Commodity trade alerts.
• When using the instant payment gateway for fund transfers with over 22 banks, there is a fee of Rs. 9 per transfer.
• For selling equities on a delivery basis, there is a Depository Participant (DP) charge of Rs. 13.5 + GST per transaction.

How to Transfer Shares Online from Demat to Another Account?

You can utilize Zerodha’s delivery instruction slips to initiate the transfer of shares from your Zerodha Demat account to another brokerage firm. In case you decide to close your Demat account with Zerodha and want to transfer your existing assets, you should include the transfer request within your Demat account closure application.

To move shares through an off-market transaction, you’ll need to complete the appropriate paper slips, affix your signature, and then dispatch them to the Zerodha office. It’s important to note that for off-market transactions, Zerodha does not offer an online share transfer option. If you’re a Zerodha customer looking to obtain delivery instruction slips (DIS slips), you can do so by completing a form available for download on their official website.

Zerodha Pros

• Top-rated Brokerage Platforms: Zerodha stands out as India’s leading stockbroker, boasting the largest client base and the highest daily trading volume. It is widely regarded as a broker of choice for those seeking safety, reliability, and trustworthiness in the Indian market.
• Commission-free Equity Delivery Trading: For equity delivery trades, Zerodha offers a brokerage-free option, allowing investors to purchase shares through cash-and-carry (CNC) without incurring any brokerage fees. This method involves no leverage, and once the shares are acquired, they are promptly deposited into your demat account. When you sell these shares, they are seamlessly debited from your demat account.
• Most Affordable Stockbroker in India: In terms of affordability, Zerodha adopts a transparent pricing structure. Clients are charged a nominal fee of 0.03% or a minimum of Rs. 20 per executed order, ensuring that brokerage costs remain affordable, regardless of the trade’s size. The maximum brokerage a customer pays is capped at Rs. 20 per trade.
• Referral Program: Zerodha also offers an attractive referral program, enabling you to earn 10% of the brokerage share by referring friends to their services.
• Independent Clearing Brokerage Service: As a self-clearing broker, Zerodha does not impose clearing charges on its customers, adding to its cost-effectiveness.
• Pay-per-Trade Pricing Models: Zerodha offers a pay-as-you-go brokerage plan, eliminating the need for prepaid brokerage plans and providing flexibility to clients.
• Utilizing GTT Order System: Zerodha’s innovative GTT (Good Till Triggered) orders feature allows investors to establish long-standing stop loss and target orders for their stock investments, enhancing control over their portfolio.
• User-Friendly Mobile App: With the Zerodha Kite 3 mobile app, designed for both passive investors and active day traders, users can expect improved speed and user experience.
• Smooth Online IPO Submissions: Zerodha facilitates online IPO applications, allowing clients to apply for new Initial Public Offerings directly through their Zerodha account. This convenience streamlines the IPO application process for investors.

Zerodha Cons

• Stock Tips and Recommendations: No provision of stock tips, research reports, or recommendations.
• Trading Plans: Monthly unlimited trading plans are not offered.
• Demat Account Charges: Lifetime free AMC demat account plans are not provided.
• Execution Charges: An additional charge of Rs. 50 per executed order for MIS/BO/CO positions not squared off by the customer. Call & Trade is available at an extra fee of Rs. 50 per executed order.
• Account Type: Zerodha does not offer a 3-in-1 trading account, as banking services are not provided.
• Back Office Integration: Zerodha’s trading platform is not integrated with its Back Office (Console). Data in the back office is updated overnight.
• IPO Availability: BSE SME IPOs are not accessible, but NSE SME IPOs are available.

FAQs

1. What is the time taken to open the Zerodha account?

Ans. Within 48 hours of receiving the form, Zerodha opens the account for commodity and stock trading.

2. Is there a minimum balance that a Zerodha Trading Account must maintain?

Ans. There is no minimum balance requirement for your Zerodha Trading Account.

3. For offline account opening, is there a home pickup feature?

Ans. No, there is no home pickup feature. You will have to mail the Zerodha account opening documents to the Bengaluru office.

4. Can a user register a trading account with Zerodha in their underage child’s name?

Ans. No, a trading account under a minor’s name is not available through Zerodha.

5. If a user already has a Demat account with some other trading platform. Can they connect it to their trading account with Zerodha?

Ans. Customers of Zerodha Kite or Console have to open both a trading and a Demat account with Zerodha only. Linking a Zerodha trading account to a Demat account from another depository participant is not permitted (DP). However, you can have multiple trading accounts with another trading platform if you want, but linking is not allowed.

Also Read: All About Groww Stocks: Pricing and Features

Zerodha offers a wide range of account options that cater to individual trading needs. Whether you’re a beginner or an experienced trader, the platform has emerged as a popular choice for all.

Source: Zerodha Support Portal