One of the relatively new concepts that have been introduced in the investment market today is the practice of offering lowest brokerage to investors albeit “Zero Brokerage.” This policy is best for the investing enthusiasts in share market.
Discount Brokers and Zero Brokerage
We admit, the term Zero Brokerage sounds very interesting and any investor who knows the significance of “Zero” will rush to avail this scheme. However, before you start investing through this scheme, it is important to understand how it functions.
It works on one simple principle of not having to pay your investment broker every time you decide to make an investment. The service ends up offering higher investment returns to investors as opposed to those offered at normal discount rates.
In the investing world, whenever investing experts lend advice to investors about when to buy and sell, they charge a small amount of the returns as their fee. This is known as brokerage charge. This payment is made to the broker every time you buy or sell shares from your account. Some of the major benefits offered by zero brokerage are:
1. The users have access to all information that they need, through online trading accounts. They can go through their investment history, look at different shares available in the market, get information on the performance of these shares, etc. As a result, they don’t need brokers or experts to advise them on buying or selling stocks. Thus, these services become free and they do not have to pay any brokerage amount or in other words – zero brokerage.
2. Zero Brokerage is also beneficial to brokers who invest and sell on a regular basis. They don’t have to pay hefty amounts of brokerage to a financial expert every time that they buy or sell shares. As a result, their investment returns are much higher than they would have been if they’d hired an expert.
3. There is an investment expert around the corner at all times. Even if the investors decide to not hire a financial expert in the beginning, trading platforms always offer financial expert services to the investors that they can hire when in need.
Always check the performance of the shares that you’re investing in. Remember, an aware investor, is a smart investor!