Is Zerodha safe for Trading and Investment: Zerodha is one of the top and most reliable discount brokers in India. As we know, stock brokers play a prominent role in facilitating your stock market financial activities in the most transparent manner.
These stock brokers are the financial consultants serving to fulfill your financial investment goals. Therefore, it is necessary for any investor to have a thorough knowledge of the brokerage company in regard to the safety services rendered by those brokers.
Here is one of the trusted stock brokers (Zerodha) that operates your stock market businesses as an intermediary financial consultant.
Is Zerodha safe for Trading and Investment?
If you are keen on taking stock market services from a leading brokerage company in India then Zerodha is the best and the safest one.
For that matter, you must look into specific factors that govern the authenticity of a brokerage company. In this article, on learning about Zerodha’s performance, safety, and reliability you will sign up for stock consulting services with them, it is for sure.
Key Facts of Zerodha:
- Zerodha began its brokerage operations on August 15, 2010, and by January 2023 it became the largest stock broker aggregating a customer base of 66 plus lakhs. These brokerage activities are a composite of customers, retail order volumes, etc.
- The company is completely a debt-free company and runs an in-house trading platform (Kite) with exuberant features supporting investors’ needs.
- Zerodha is registered with SEBI and a signed-up member with BSE, NSE, MCX, and NCDEX.
- The SEBI and stock exchanges make a regular audit of the Zerodha accounts to check whether the company works in compliance with established regulations.
- The company holds a Depository Participant license with CDSL and is assigned to manage customer demat accounts as well.
- Zerodha functions to be an intermediary between its registered customers and the CDSL.
- Zerodha acquires Power of Attorney, PoA, that issues partial or full legal authority to operate your demat account.
- The authority(PoA) is restricted to the agreed terms and conditions on debit/credit or pledge securities.
Note: The above lines provide information on Zerodha, updated as on January 01, 2023. The stock market regulatory agencies have verified Zerodha and released a report that states no major violations of regulations took place to date.
What Makes Zerodha to be a Reliable Broker?
Debt Free Company
The company is built from scratch and it holds a zero-debt position which means it is free from any form of borrowing from financial institutions.
Doesn’t Encourage Margin Funding
Zerodha enables investors to work in a risk-free zone as it never encourages margin funding. In this kind of operation, your securities will be pooled into an account for investing in stocks or other securities.
Uniform Pricing Model
The company entertains a single brokerage rate for all its customers that controls the operational risks considerably. The brokerage charges are the same for an investor or an HNI.
Ensures No Profits on Zerodha Platform
Zerodha offers its business platform to conduct buying and selling of underlying assets and never assures profits on buying or selling of an asset.
Offers No Proprietary Trading
Usually, stockbrokers conduct proprietary trading by drawing funds from the customers’ accounts.
It is not so here, and the same is explained in detail by Nithin Kamath, founder of Zerodha about the stoppage of proprietary trading in September 2019.
No Credit Risk
In the financial stock markets, you will find serious financial repercussions when there is an economic downturn.
Zerodha is fully prepared to face such economic crises if it does occur. But how? Traditionally, the company does not lend more than 5 percent of the capital owned by the company.
Moreover, the company holds a capital base that is four times the total investment done by the investors over the brokerage platform. Hence you can rely on the credit support issued by the company at any given point in time.
Company Records Lowest Complaints from Clients
With a huge customer database, you will certainly observe complaints but the active client ratio submitting complaints is very low.
Membership Details of Zerodha’s Stock Brokerage:
Zerodha Broking Ltd.: Member of NSE & BSE – SEBI Registration no.: INZ000031633
Depository services: SEBI Registration No.: IN-DP-431-2019; DP ID: 12081600 (Zerodha Securities Pvt. Ltd.)
Commodity Trading through Zerodha Commodities Pvt. Ltd. MCX: 46025 – SEBI Registration no.: INZ000038238
- On filling the lines above with various credentials it is a fact that Zerodha should be viewed as a safe, reliable, and trustworthy broker in India.
- With the level of certifications and memberships it acquired you should never step back but make it the right choice rather.
- The company has partnered with several corporations in enabling them to conduct the right form of financial stock businesses.
- Quite recently, the company obtained a mutual fund license and it became a part of its market expansion. However, you can trust it to be a safe place to perform stock trading and even it is a leading stockbroker in India.