They say earning money is easier than saving and making it grow. Generally, investors are faced with two major dilemmas with regards to their investment decisions:
- Choosing an appropriate investment strategy to grow their wealth and
- Choosing the right broker or mediator to implement those investment strategies.
Sure, choosing an investment strategy is challenging, but choosing the right broker is even more difficult. A lot is at stake. You're giving your money to a broker and depending on them to make investments on your behalf and reap gains on such investments. And trust is one luxury people find it difficult to afford these days.
We are writing these blog articles to help the investors in choosing the appropriate brokers. In the follow-up to our previous article on Zerodha vs Upstox, we look into Kotak Securities vs ICICI Direct today.
Kotak Securities
Kotak Mahindra Bank's subsidiary, Kotak Securities Limited, was founded in 1994 to offer stockbroking services and distribute financial products in India. It is a full-service broker. Known as an innovator in the industry, Kotak Securities was the first to provide margin financing to its customers and enable investing in IPOs and mutual funds on the phone.
Their broking app allows the customers access to markets across various platforms, mobile devices, and tablets, allowing the registered and guest users to view live prices, track portfolios, and trade.
ICICI Direct
ICICI Direct is one of the largest retail broker and financial products distributor in India, which has revolutionized the world of online investing. It is an online share trading platform that provides seamless and hassle-free electronic trading.
ICICI Direct offers more than fifty products and services, which include (but are not limited to) mutual funds, derivatives, ETFs, insurance, and tax services. ICICI directly stands apart from its competitors because of its unique research desk that offers various research-based products designed to meet different investors' investment needs. Since its inception, the ICICI direct research teams have had a 75% strike rate.
How are they different from each other?
Let's critically differentiate between Kotak Securities and ICICI direct:
Company details:
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Particulars
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Kotak Securities
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ICICI Direct
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Incorporation year
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1994
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2000
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Type of broker
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Full-service broker
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Full-service broker
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Supported exchanges
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NSE, BSE, MCX, NCDEX
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BSE, NSE
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Account type offered
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Fixed brokerage plan
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3-in-1 account (I-secure plan)
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Product offering
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Equity, commodity, currency, futures, options
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Equity, commodity, currency, futures, options
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Other investment options
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Mutual funds, IPO platform, bonds, and debt, exchange-traded funds and insurance
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Mutual funds, IPO platform, bonds and debt, exchange-traded funds and insurance
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Additional features
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3 in 1 account, free trading calls, free research reports, SMS alerts, margin funding, and margin against share
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3 in 1 account, free trading calls, free research reports, SMS alerts, margin funding, and margin against share
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Differentiating Kotak Securities and ICICI Direct based on their brokerage plans and charges
*Kotak - Cash Back and ICICI - Prime
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Particulars
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Kotak Securities
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ICICI Direct
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Basic charges
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Account opening
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Free
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Free
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AMC
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Rs. 600 per annum
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Rs. 700 per annum
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Plan charges
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Rs. 1179 per annum
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Rs. 299 per annum
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Call & trade charge
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Rs. 50 per order
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Free
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Brokerage charges
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Equity delivery
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0.39% on order value
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0.75% as low as 0.15%
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Equity intraday
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0.04% on order value
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0.25% as low as 0.009%
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Equity futures
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0.04% on order value
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0.03% on trading value
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Equity options
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0.01% on order value, up to Rs. 300
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Rs. 20 per order
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Currency futures
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0.04% on order value
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Rs. 20 per order
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Currency options
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0.03% on order value, up to Rs. 15
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Rs. 20 per order
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Commodity futures
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0.025% on order value, additional Rs. 250
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Rs. 20 per order
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Commodity options
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0.049% on order value, up to Rs. 25
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Rs. 20 per order
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Margins
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Equity delivery
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2x as per exchange
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2x as per exchange
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Equity intraday
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2x as per exchange
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7x as per exchange
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Equity futures
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2x as per exchange
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4x as per exchange
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Equity options
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1x/50x – Buy: 1x, Sell: 50x
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4x/2x – Buy: 4x, Sell: 2x
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Currency futures
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2x as per exchange
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4x as per exchange
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Currency options
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1x/50x – Buy: 1x, Sell: 50x
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0x as per exchange
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Commodity futures
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2x as per exchange
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2.5x as per exchange
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Commodity options
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2x as per exchange
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0x as per exchange
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Transaction & Other Charges:
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For equity delivery
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Transaction charges
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NSE – 0.00325%
BSE – 0.00325%
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NSE – 0.00325%
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Demat transaction charges
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Sell-side, Rs. 18.50 per scrip
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Sell-side, Rs. 18.50 per scrip
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Clearing charges
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-
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-
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GST
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-
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18% on brokerage + transaction + Demat
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STT
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as per exchange
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Rs. 100 per lakhs
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SEBI Charges
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Rs. 15 per crore
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Rs. 15 per crore
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For equity intraday
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Transaction charges
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NSE – 0.00325%
BSE – 0.00325%
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NSE – 0.00325%
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Demat transaction charges
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-
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-
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Clearing charges
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-
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-
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GST
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-
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18% on brokerage + transaction
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STT
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0.10%
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Sell-side, Rs. 25 per lakhs
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SEBI Charges
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Rs. 15 per crore
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Rs. 15 per crore
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For equity futures
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Transaction charges
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NSE – 0.0019%
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NSE – 0.0019%
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Demat transaction charges
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-
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-
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Clearing charges
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-
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NSE - 0.0002%
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GST
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-
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18% on brokerage + transaction + clearing
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STT
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0.025% - sell side
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Sell-side, Rs. 10 per lakhs
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SEBI Charges
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Rs. 15 per crore
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Rs. 15 per crore
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For equity options
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Transaction charges
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NSE – 0.05%
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NSE – 0.05%
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Demat transaction charges
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-
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-
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Clearing charges
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-
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NSE – 0.005%
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GST
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-
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18% on brokerage + transaction + clearing
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STT
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0.01% - sell side
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Sell-side, Rs. 50 per lakhs
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SEBI Charges
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Rs. 15 per crore
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Rs. 15 per crore
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Commodity futures
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Transaction charges
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MCX – 0.0026%
NCDEX – 0.0006%
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0.0026% non-agri
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Clearing charges
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-
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0.00%
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GST
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18% on brokerage + transaction
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18% on brokerage + transaction
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STT
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Sell-side, 0.01%
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Sell-side, 0.01% non-agri
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SEBI charges
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Rs. 15 per crore
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Rs. 15 per crore
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Commodity options
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Transaction charges
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Waived off
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-
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Clearing charges
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-
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0.00%
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GST
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18% on brokerage + transaction
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18% on brokerage + transaction
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STT
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Sell-side, 0.05%
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Sell-side, 0.05%
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SEBI charges
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Rs. 15 per crore
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Rs. 15 per crore
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Currency futures
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Transaction charges
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NSE – 0.0009%
BSE – 0.00022%
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NSE – 0.0009%
BSE – 0.00022%
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Clearing charges
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-
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NSE – 0.0004%
BSE – 0.0004%
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GST
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18% on brokerage + transaction
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18% on brokerage + transaction
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STT
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-
|
-
|
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SEBI charges
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Rs. 15 per crore
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Rs. 15 per crore
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Currency options
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Transaction charges
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NSE – 0.035%
BSE – 0.001%
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NSE – 0.04%
BSE – 0.001%
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Clearing charges
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-
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NSE – 0.025%
BSE – 0.025%
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GST
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18% on brokerage + transaction
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18% on brokerage + transaction
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STT
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-
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-
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SEBI charges
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Rs. 15 per crore
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Rs. 15 per crore
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A Look at the Pros and Cons
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Particulars
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Kotak Securities
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ICICI Direct
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Pros
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- Wide range of investment options.
- Daily alerts, market pointers, research reports, stock recommendations, etc.
- PMS services & foreign investment.
- NRIs can open accounts with Kotak Securities.
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- Valid till cancelled (VTC) option allows the customers to place buy or sell order limits which remain valid for 45 days.
- Offers intensive research-based financial advice on almost all asset classes.
- Free of cost provision of technical and stock tips and analysis to customers.
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Cons
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- Higher account opening charges compared to other full-service brokers.
- Huge variance in call and trade charges with the frequency of investing.
- Minimum account to be compulsorily deposited to open an account.
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- Higher brokerage charge – to subvert these charges, customers are required to subscribe to ICICI Direct Prime or prepaid brokerage plans.
- The minimum brokerage charged under the I-secure plan is high for irregular traders.
- Higher brokerage for traders who trade in penny stocks.
- Higher charge for call & trade (after the first 20, free calls in a month).
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What do Customers Think?
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Particulars
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Kotak Securities
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ICICI Direct
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Charges
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Rating – 3/5
- Low brokerage charges.
- Higher equity delivery charges.
- Various tools & services with premium plans are a plus.
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Rating – 2.5/5
- Low brokerage charges available at extra charges and conditions.
- Higher equity delivery charges.
- Minimal call & trade charges with unlimited order placing facilities.
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Usability
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Rating – 2.8/5
- User-friendly platform & easy to navigate.
- Easy account opening process.
- Time-consuming offline process.
- Limited bank support for online process.
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Rating – 3/5
- User-friendly platform & easy to navigate.
- Free trade calls & research reports via mail.
- Single platform for FDs, insurance, home loans.
- Well organized educational content for beginners.
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Customer Service
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Rating – 3.5/5
- Excellent call and email support.
- Prompt customer support.
- Automated chat and option to raise tickets.
- Presence of physical branches in various cities.
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Rating – 3.5/5
- No chat support and no option to raise tickets.
- Prompt customer service responses over call and mail.
- Dedicated RM provided to all the customers.
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Closing remarks
Kotak Securities and ICICI Direct both have their pros and cons. Kotak Securities has been around for over 25 years and is known for its prompt customer service. On the other hand, ICICI Direct is known for its well-researched tips and analysis.
This article provides an overall picture of the product baskets and features of these full-service brokers. For more detailed analysis, do visit Select by Finology.
Stay Positive, Test Negative!
Happy Investing.