Indian equity investors never had it so good. After multiplying their capital, thanks to the tremendous bull run, they can now even trade in shares without paying any brokerage fees thanks to Anil Ambani’s Reliance Money.
All demat account holders of Reliance Money (owned by Reliance Capital) could trade in shares for value upto Rs.5 lakh in one year without any brokerage. Thereafter investors would have to pay Rs.500 for trading up to Rs.1 crore (for 2 months) or Rs 2,500 for Rs.6 crore (for a year).
Earlier, Reliance Money was the first brokerage to offer flat fees structure by charging Rs.500 for trade upto Rs.5 lakh. The demat account opening fees of Reliance Money is Rs.750 while annual maintenance fees is Rs.50.
The move of Reliance may create a price war in the industry as other industry players charge on a percentage basis. It will also help in expanding its customer base and get it more clients.
The account may prove to be economical for regular investors who trade quite frequently but small and non-frequent investors, it is still advisable to adopt the traditional brokerage structure as they get to pay brokerage only when they trade rather than paying a flat fees even when they have not traded.
For corporate, institutional and HNI clients, special rates are charged by brokerage companies along with other facilities like portfolio management and customised products. In that case, Reliance Money would have to do more to attract those clients.