Is Zerodha safe? Is it Legit or Scam?
Zerodha provides trading in stocks, commodities, and bonds to its customers. The company uses automated trading algorithms along with human intervention for optimum portfolio management. Zerodha provides access to the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). It also facilitates trading on a variety of global exchanges, including the Nigerian Stock Exchange, United States Stock Exchange and Hong Kong Stock Exchange.
When moving money online, it is understandable to be reluctant or hesitant in regards to trusting a platform or company. After all, there are a lot of scams out there, and many people fall victim to them. How can one tell if a company is legitimate or not?
Is Zerodha Legit?
Zerodha Broking Limited is a financial services firm with retail brokerage, commodity trading, mutual funds, and bonds as its primary products. The company is headquartered in Mumbai, Maharashtra and has a number of offices across India.
One simple way to determine the legitimacy of a company is by its regulatory and compliance standing. Many financial experts and investors alike look for companies that are compliant with regulations, as this ensures better security and transparency in dealings. These companies usually have much stricter rules and guidelines in regards to how things are done, thus creating piece of mind that all is well with the company.
When looking into Zerodha, it would not be wrong to say that it does really well when rated for legitimacy. This financial company has been registered under SEBI, which allows investors to have peace of mind knowing they are dealing with a company that follows guidelines and regulations.
Is Zerodha Regulated?
Zerodha is as secure as any other Indian stock broker. Zerodha is a genuine and trusted exchange. Zerodha is a legal stock trader in India. The firm is licensed by SEBI, CDSL, BSE, NSE, and MCX, and follows stock market regulatory bodies' rules. There have been no allegations of legal wrongdoing against the firm.
Is Zerodha Safe to Use?
If a company is considered by the public to be stable, this usually means there are no issues behind the scenes with their operations or management. Regardless of how well a company may be doing financially, it would not gain much traction if there were rumors about issues concerning their practices or dealings. As a result of this, companies that are considered to be stable by the public tend to do better financially and have a longer shelf life because they have gone through any potential issues that could derail them.
Zerodha has also been rated high for financial stability by independent agencies. In fact, it has been noted as being one of the rare companies to be able to stay afloat during the financial crisis, due to its sound investment practices. The company has also received high ratings for having a stable business model that is known to perform well even in bad economic times.
Investors protection Fund
Funds are held directly by stockbrokers for their clients. SEBI requires stockbrokers to maintain a client pool account for each client. These funds can only be used by the stockbroker for investments and transactions procured from their clients.
If your stockbroker fails, the Investor Protection Fund protects your money (up to Rs. 25 lacs) if your bank goes bankrupt.
If your stockbroker goes bankrupt, you have three years from the date of the bankruptcy to file a claim for compensation. You may find information on eligibility criteria for such claims from SEBI.
Zerodha Pros and Cons
Zerodha is undoubtedly a prevalent platform that operates in a high risk sector, and for that reason it's important to consider its benefits and drawbacks prior to registering. Here, we'll go over a few pros and cons relating to the platform and its features.
Despite some limitations, Zerodha definitely does offer some desirable features and tools through which you can conveniently make investments. At the moment, it is considered to be one of the best companies in India when it comes to trading stocks and commodities.
The trading platform continues to improve; it is technically sound and feature packed. Fees are competitive, execution is generally good (though not quite as fast as the best in the market) and customer service appears top notch. Zerodha is a serious broker that has been around a long time and is a solid choice. It has a presence in other countries as well, meaning you can deal with the same company from India whether you reside within or outside of the country.
Zerodha is an efficient stock broker that serves as a one-stop solution to all your trading needs. Zerodha has been rated as one of the best stock trading platforms in India, and it continues to gain popularity year after year.
Moreover, trading with Zerodha is convenient. It can be done using any computer or smartphone, as long as you have an Internet connection. The online platform has been optimized for all types of devices (desktop or mobile), so switching between them is not a problem. The trading software is available in multiple languages, so you can choose the one that suits your needs best.
👍 Zerodha Pros
• Great trading platforms
•Solid research
• Electronic wallet deposit available
• No withdrawal fee
👎 Zerodha Cons
• Only Indian market covered
• Slow account opening process
Summary
Zerodha has a good suite of services and a proven track record. The company is growing rapidly, bringing in new products and services that help the broker to take bigger market share from its competitors. That means that existing clients can expect continued improvement, while potential customers have an opportunity to become part of India's fastest growing brokerage firm.
Zerodha is no doubt one of India's foremost names when it comes to discount brokerage, and it has become a success story in the world of technology. With its sound financial practices and great reputation, Zerodha is certainly one company that can be trusted to take you where you need to go.
FAQs
Can You Use Zerodha Internationally?
Viewed as an excellent platform for beginners and experts alike, Zerodha can be used internationally with few restrictions. An FPI account can be opened by non-residents/companies with Zerodha. To begin the process however, you'll need a PAN Card.
Can You Trade NSE/BSE Commodities With Zerodha?
Zerodha is not currently offering trading in NSE & BSE commodity derivatives, however reportedly plans on offering such features soon, stating that they will keep clients updated and notify them once they are live.
What does GSM mean?
GSM stands for 'Graded Surveillance Measure'. Securities and Exchange Board of India (SEBI) and Exchanges, in order to improve market integrity and protect investors' interests, have been introducing various enhanced surveillance methods such as price band reduction and periodic call auction.
What Is An Indicative Profit And Loss Report?
An indicative profit and loss report is a profitability statement for all transactions entered during the specified time period, based on the prior closing price of holdings and open positions as of a given "from date." These metrics are available through Console, the main dashboard of your Zerodha account.
Glossary for novice traders
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1
Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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2
Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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3
Investor
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
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4
Index
Index in trading is the measure of the performance of a group of stocks, which can include the assets and securities in it.
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5
Cryptocurrency
Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.
Team that worked on the article
Dwight specializes in risk, corporate finance, alternatives, fintech, general business trends, and financial markets, and he has broad experience managing complex projects. Dwight is an author for the Traders Union website.
Dwight was a financial columnist for The Wall Street Journal and The New York Times during the Great Financial Crisis. He has served as Editor-in-Chief of Worth, a personal finance magazine for the wealthy, and as Editor of Risk, the premiere global publication about derivatives, risk management, and quantitative finance, based in London.
He has also served as Managing Editor at The Economist Group and ran the Americas operations of two British trade publications.
For the last 12 years, Dwight has worked as a freelance writer and editorial project manager, serving clients in the financial technology, banking, broker/dealer, consulting, asset management, and corporate sectors. This has given him considerable experience in idea generation and project management, working collaboratively to help clients meet their goals with little or no supervision.
Jason Law is a freelance writer and journalist and a Traders Union website contributor. While his main areas of expertise are currently finance and investing, he’s also a generalist writer covering news, current events, and travel.
Jason’s experience includes being an editor for South24 News and writing for the Vietnam Times newspaper. He is also an avid investor and an active stock and cryptocurrency trader with several years of experience.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).