Recent reports highlight the growing number of Indians opening a Demat account each month, indicating that more people have become aware of the stock market’s wealth-building potential. Yet, not everyone realizes the true cost of trading beyond profit and loss from market fluctuations.

Numerous costs are needed to be paid when a stock is bought or sold online.

1. Brokerage Charges: 

Trading apps charge brokerage fees for executing orders on behalf of their clients. Brokerage charges can be avoided by choosing a zero brokerage stock trading platform like mStock, which waives brokerage fees for a lifetime in exchange for a one-time payment.

2. Securities/Commodities Transaction Tax: 

Stock exchanges impose these taxes and are unlikely to vary between different stock market apps. The rate and conditions differ depending on the instrument being traded.

3. Transaction charges:

These charges are usually applicable to both buy and sell orders. Transaction charges vary depending on the investment instrument being traded and the exchange that an investor is using to buy shares online.

4. SEBI Charges:

The rate is fixed for both buy and sell orders at 0.0001% of the transaction price for all investment instruments (except debt instruments, for which it’s applicable at 0.000025% of the transaction price.)

5. GST: 

GST is fixed at 18% of the sum of brokerage fees, SEBI charges, and transaction taxes.

6. Account Maintenance Charges:

When someone open trading account through a broker or platform, the broker usually charges a fee to keep the account active. This fee can be avoided by choosing an app like mStock that offers a separate plan to waive the maintenance fee forever for a one-off payment.

7. Stamp Charges:

These fees are levied by state governments, mostly on the buyers. The rate differs depending on the government and the type of security being traded. 

8. Payment Gateway Charges:

This is the fee charged by the payment gateway to facilitate trade. It varies depending on the payment method and the bank in which the investor has an account. UPI transactions are free.

9. Delayed Payment Charges:

These are interest charges levied by brokers or apps when there is an outstanding debit balance or deficit in the client’s trading account. This happens when clients delay paying the required amount for executed trades or margin obligations within the stipulated time period.

10. Depository Participant Charges:

These are the fees levied by the CDSL and the stock market trading platform for ‘sell’ transactions, regardless of the order quantity. The charges can be avoided by indulging in types of trading that don’t involve the deposition of shares in the Demat account. 

While not exhaustive, the list provides a basic overview of the charges that an investor would have to pay when trading. Certain charges set by stock exchanges must be paid regardless of the trading platform. There may even be some platform or app-specific charges, such as account closure or reactivation fees, which can be avoided by choosing a Demat account app like mStock.