Much like a Demat account, a trading account in India is essential to sell or purchase shares online on the stock market. Earlier on, the open outcry system was how the stock market functioned. Traders had to be physically present, and use verbal communication and hand-signals, likened to bidding for a share, to convey their trading decisions. Once the digital age came around, this system was replaced with the current trading accounts.
Today, traders and investors simply create an online trading account. Investors are usually required to enlist the help of a professional stockbroker to carry out their buying and selling decisions for them. While there are exceptions, brokerage firms rarely offer free trading accounts as there are maintenance and opening charges.
Due to easy accessibility via the internet, many people have jumped onto the stock market bandwagon. Around 22.5 million people with a trading account in India were partaking in the stock market in 2016. To manage this global influx of new traders, each trader is allotted a unique trading ID, which helps to individually identify traders and their transactions.
Stock markets are open for certain hours during the day during which the market can be seen and trades can be carried out. These are known as trading hours. There are various strategies to employ when trading. These include buying and selling a share on the same day (intraday trading) or holding onto a share until it starts to trend and then immediately selling it at a profitable margin.
Similar to other full-service brokerage firms, IIFL does not offer free trading accounts. However, it charges nominal fees for opening and maintaining a trading account. Here are the general charges to run a trading account with IIFL.
|Trading Account Opening Charges IIFL|
|Account Processing Charges||₹0|
|Trading Account Opening Charges [One Time]||₹750|
|Trading AMC [Yearly]||₹0|
IIFL offers two different plans for users to choose from: the Flat Brokerage Plan (FBP) and the Variable Brokerage Plan (VBP). Here’s how each of these plans works.
As the name suggests, in a flat brokerage plan, one is charged a fixed or flat percentage on the total value of assets they trade, irrespective of turnover rate. The fixed charges under this plan are detailed as follows:
|Segment||Flat Brokerage (%)|
|Delivery (Normal) settlement||0.50%|
|Trade-for-Trade/Z group script||0.75%|
|Options (buying/selling)||1% of premium or ₹100/- per lot, whichever is higher|
|Minimum share per brokerage||₹0.05|
Under the variable brokerage plan by IIFL, the rate charged on brokerage varies depending on the volume of trades made in a month. The amount of trading volume that you achieved during the last 20 trading days (including the current day) will determine the brokerage slab for the current trading day. All charges under the Variable Brokerage Plan are as follows:
|Monthly Trade Volume||Delivery Rate|
|< ₹1 lakh||0.60%|
|₹1 lakh – ₹5 lakhs||0.55%|
|₹5 lakhs – ₹10 lakhs||0.45%|
|₹10 lakhs – ₹20 lakhs||0.35%|
|₹20 lakhs – ₹60 lakhs||0.25%|
|₹60 lakhs – ₹2 crores||0.20%|
|> ₹2 crores||0.15%|
|Monthly Trade Volume||Rate|
|< ₹20 lakhs||0.05%|
|₹20 lakhs – ₹1 crore||0.04%|
|₹1 crore – ₹5 crores||0.03%|
|> ₹5 crores||0.02%|
|Monthly Trade Volume||Square-off||Settlement|
|< ₹1 crore||0.05%||0.05%|
|₹1 crore – ₹5 crores||0.04%||0.04%|
|₹5 crores – ₹10 crores||0.03%||0.03%|
|₹10 crores – ₹50 crores||0.025%||0.025%|
|> ₹50 crores||0.02%||0.02%|
|Monthly Premium Volume**||Square-off||Settlement||Min rate per lot (square off)||Min rate per lot (settlement)|
|> ₹4 lakhs||2.5%||2.5%||₹100||₹100|
|₹4 lakhs – ₹10 lakhs||2.0%||2.0%||₹100||₹100|
|₹10 lakhs – ₹20 lakhs||1.75%||1.75%||₹80||₹100|
|₹20 lakhs – ₹50 lakhs||1.25%||1.25%||₹60||₹100|
|> ₹50 lakhs||1%||1%||₹40||₹100|
** Premium volume is (premium*lot size*No of Lots).
The value-added subscription plan has been designed for frequent traders. There are 7 different subscription plans under the model. By paying a specified amount, one can avail more economical brokerage costs for a certain duration. This set of subscription plans makes for a range of choices depending on one’s online trading account behaviour. For instance, under the ₹5000 plan or V5000VAS, the brokerage for delivery trades reduces to 0.35% as against 0.50% in the default plan, while the validity period of 1 year remains the same. Here are all the charges associated with all 7 plans.
|Plans||Default Plan||1. V1000||2. V2000||3.V5000VAS||4. V10KVAS||5. V25KVAS||6. V50KVAS||7. V1LVAS|
|Value Added Subscription Value (a)||Nil||₹1000||₹2000||₹5000||₹10000||₹25000||₹50000||₹100000|
|GST(₹) (b)||As per Current Applicable Rates|
|Account Opening Charge (c)||1.75%||Nil||Nil||Nil||Nil||Nil||Nil||Nil|
|Total Margin Cheque (a+b+c)|
|Intraday Trading Brokerage CM- (buy or sell)||0.05%||0.03%||0.02%||0.04%||0.03%||0.02%||0.01%||0.01%|
|Trading Brokerages Futures- (buy or sell)||0.05%||0.03%||0.02%||0.04%||0.03%||0.02%||0.01%||0.01%|
|Intraday Trading Brokerage Futures-(buy or sell)||0.05%||0.03%||0.02%||0.04%||0.03%||0.02%||0.01%||0.01%|
|Options Trading Brokerage- (buy or sell)||1% of premium or ₹100/- per lot whichever is higher||1% of premium or ₹70/- per lot whichever is higher||0.50% of premium or ₹60/- per lot whichever is higher||1% of premium or ₹90/- per lot whichever is higher||1% of premium or ₹70/- per lot whichever is higher||0.50% of premium or ₹60/- per lot whichever is higher||Flat ₹40/- per lot||Flat ₹20/- per lot|
|Minimum Brokerage Per Share (Delivery, Futures and Cash Intraday)||₹0.05||₹0.05||₹0.03||₹0.05||₹0.05||₹0.03||₹0.01||₹0.01|
|Plan Validity||1 year||1 Month||1 Month||1 year||1 year||12 Months||12 Months||12 Months|
Without access to a quality trading platform, your trades can get tedious and difficult to manage, ultimately resulting in losses. On the other hand, using a good trading platform can improve your trading skills. India Infoline (IIFL) offers its users a host of advanced and innovative trading platforms that perform with state-of-the-art technology. When you open an online trading account on IIFL, you get access to the following cutting edge trading tools and platforms.
Operating a trading account in India offers some special features and benefits to users. They are:
Yes, you can trade in the derivatives market with an IIFL trading account.
IIFL is a full-service broker and provides high-quality research and other financial data to investors. Discount brokers usually just provide buying and selling services.
With both, an IIFL demat and trading account, you can invest in mutual funds along with stocks, currencies and commodities. IIFL has also developed a dedicated platform IIFL MF App for mutual fund investments.
If you are trading in the cash delivery system, you will be charged a minimum of ₹ 25 per scrip under the variable brokerage and flat brokerage plans.
Yes, you can invest in IPOs and FPOs through an IIFL demat-cum-trading account.