Is Zerodha Safe And Reliable
Last Updated: Nov -13-2019
Need help choosing a broker?
We can help you find the right broker and save upto 90% in brokerage fees.
Wondering whether Zerodha is Safe and Reliable? Here are all the answers.
There are several stockbrokers in the market and many more are coming in the market. With so many names in the stockbroking industry, it is creating a confusion in the minds of people as to which is more reliable and how to choose the best broker?
Zerodha is one of the top names in the list of online discount brokers in India. However, people who wish to invest always have a second thought about whether Zerodha is safe and reliable. Very often people tend to have the following questions running on their minds all the time.
- Is investment in Zerodha a safe choice to make?
- Can Zerodha be trusted?
- Is this discount broker going to stay in the market for long?
These types of questions not only arise in the minds of people who have just started trading, but also cross the minds of experienced traders. The concept of discount broking started a decade ago; however, since Zerodha is offering low brokerage fee, its service is always doubted.
Regardless of what people say, there have been instances when a discount broking firm has just vanished from the market. For instance, F6 Online, Wealth Mantra, Amrapali Trading, and Orion Capital.
Hence, it is very important to understand everything about a broking firm before you start trading. You as a customer has all the rights to know all the positives and negatives of a firm that you think will help you meet your financial expectations. In this blog, we will go through all the questions and their answers that will provide you all the right facts about Zerodha?
When did Zerodha initiate?
Zerodha was started in the year 2010 and is the first discount broker of its kind. Prior to that, only full-service broker existed in the market. Zerodha stood out for its wide range of services offered at low brokerage. Similar to any discount broker, zerodha offers limited services at a flat brokerage rate.
Is Zerodha registered with the regulatory bodies?
Zerodha is registered with different bodies.
SEBI – INZ000031633
CDSL – IN-DP-100-2015
MCX – 46025
NCDEX – 1138
You can also request SEBI to provide all details about the broker that you wish to trade with.
What is the number of active clients with Zerodha?
In the financial year 2019-20, Zerodha has an active client base of 9,50,082. Until now, Zerodha holds the first position in the list of best discount brokers in India.
How often does Zerodha get complaints from its clients?
In the financial year 2018-19, Zerodha received just 119 complaints from its complete client base of 7,11,082 which is just 0.01% of complaint rate. This definitely proves that Zerodha is a trustworthy brand and is the best in the market.
Financials of Zerodha
In the financial year 2017-18, Zerodha cloaked profit before taxes in the range of Rs 180 crore. This actually makes Zerodha a profitable company. The owner of Zerodha, Nitin Kamath also ruled out the possibility of any outside funding. This proves to be a good sign for the business and ensures that it is running efficiently without any external financial help.
Can I invest with Zerodha for long-term?
Zerodha has been a known name in the broking industry for almost a decade now. In addition, all your investment in the form of shares is stored in electronic form in the Demat account. This account can only be managed by you and not by any other broker, not even Zerodha. These stocks are managed by the regulatory bodies such as CDSL and NDSL. Hence, you need not worry about your shares. Even if Zerodha shuts down someday, your shares will remain safe.
How is the performance of Zerodha’s trading platforms?
Despite being a discount broker, Zerodha offers a range of trading platforms to its customers, like, Zerodha Kite, Zerodha Pi, Zerodha Kite Mobile App, etc. However, over the years there have been some complaints raised by users regarding the speed of the trading tool being lowered during high traffic.
What happens if someday Zerodha does bankrupt?
If that day arrives when Zerodha is declared bankrupt, all you need to do is file a claim with your demat and trading account details and the depository participant will handle the matter ahead. In the broking industry, there is a term known as ‘Investor Protection Fund’ (IPF) that works as a backup plan in case of such adverse conditions when a broking firm has to be declared bankruptcy. According to SEBI, here are some conditions to be followed while making a claim.
- If the claim is raised within the stipulated time period, retail investors will be eligible for compensation. (Maximum of Rs 15 lacs)
- If the claim is raised within 3 years of the time period, the compensation decision is made by the IPF trust
- If the claim is raised after 3 years of the time period, the retail investor is not eligible for compensation.
SEBI has strict regulations through its exchanges which provides freedom to all the clients who wish to lodge a complaint against their broker. In addition, it takes a lot to become a broker in India. SEBI has laid down some strong ground rules for brokers such as,
- Huge entrance cost is charged
- Strict financial disclosures at discretion at SEBI
- Regular audits and inspections are carried out from time to time
- If the client does not use his or her money for a period more than 3 months, the stockbroker is not allowed to keep the money.
Thanks to this, you can be rest assured about your investments. Your money and stock entities will remain with you whatsoever.
These were some questions that we think frequently cross the minds of active traders and want-to-be traders. Looking at the facts mentioned in the blog, you can be sure about one thing, Zerodha is a safe and reliable trading choice. Investyogi recommends all its readers to have a thorough research of the broking firm before making a choice. Understand your trading requirements and see how the broker can fulfill them. If you think we have missed a question, drop it in the comments section below and mail to us and we will call you back with an explanation over the same.
In case you are looking to get started with stock market investments,let us assist you in taking the next steps ahead.
Enter basic details here and a callback will be arranged for you!