Zerodha fees explained

It's safe to say that Zerodha's fees are low in general. They either don't charge a brokerage fee for things other brokers do charge for, or they only charge a small amount. This means that you can use Zerodha even in case you trade frequently like multiple times a week or daily.

Here's a high level overview of Zerodha's fees

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely due to the fact that online brokerages' businesses can be much better scaled: From a purely technical standpoint it doesn't make that much of a difference for them if they have 100 or 5000 clients.

This is not to say however that they don't have any fees at all. They make money by charging you at various events for various rates. Usually you need to keep an eye on these 3 types of fees:

• Trading fees - these are brokerage fees that you pay when you actually do a trade. What you pay is either a commission, a spread or financing rate. Some brokers apply all of these.
  • A commission is either based on the traded volume or it is fixed.
  • A spread is the difference between the buy price and the sell price
  • Financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
• Non-trading fees. These occur related to some operations you make in your account, i.e. depositing money to your account, withdrawing money from it or not trading for an extended amount of time.

We compare Zerodha fees with its closest competitors, Sharekhan and Interactive Brokers.

Zerodha's trading fees are low which makes it suitable for you even if you trade often (i.e. multiple times a week).

Let's break down the trading fees into the different asset classes available at Zerodha.

Trading fees

Zerodha's trading fees are low.

Stock fees and ETF fees

Zerodha has low stock trading fees.

Forex fees

Zerodha's forex fees are low.

Fund fees

Zerodha fund fees are .

Bond fees

Zerodha has bond fees.

Options fees

Zerodha's options fees are .

Futures fees

Zerodha's futures fees are .

Financing rates

Zerodha financing rates are .

If you want to trade on margin and prefer to hold your positions long, financing costs can be significant.

Leverage is a double-edged sword and can dramatically amplify your profits. It can also just as dramatically amplify your losses. Trading foreign exchange/CFDs with any level of leverage may not be suitable for all investors.

When it comes to looking at all the non-trading fees Zerodha is a cheap broker. This means that they don't charge you a lot for non-trading related activities on your trading account, like withdrawal fee.

Non-trading fees include various brokerage fees and charges at Zerodha that you pay not related to buying and selling assets. Among some others, typical non trading fees are withdrawal fee, deposit fee, inactivity fee and account fee.

Deposit fees are applied when you send money to your trading account from your bank account. Usually brokers don't charge money for that and Zerodha is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods Zerodha offers.

Unlike some online brokers we have reviewed Zerodha does not charge a withdrawal fee. This means that you'll see the same amount of money on your bank account that you transferred from your brokerage account.

Zerodha does not apply an inactivity fee which is great because your account will not be charged even if you do not trade for a longer time period (months or years).