5Paisa: Offers, Advantages, Disadvantages, and more

About  5Paisa

5paisa or 5paisa.com or 5Paisa Capital Limited is an online discount brokerage company offering a range of financial services to retail investors in India. Publically traded and professionally managed, the company is promoted by ‘India Infoline Finance Holdings Limited’ (IIFL Holdings Ltd.), a Mumbai-based, full brokerage and diversified financial products & services providing company, founded by Nirmal Jain. It is an online trading portal of IIFL. ‘5paisa Capital Ltd’ is a member of BSE & NSE.

5Paisa Capital Limited (5PCL) launched as an online portal named 5paisa for India Infoline Finance Holdings Limited in 2007, was incorporated on July 10, 2007, as a public limited company under provisions of Company Act (CA), 1956 through ROC by the certificate for commencement of business.

The company is a fully owned subsidiary of IIFL Capital Limited (a company dealing in retail broking for over 20 years), facilitates a web-based trading platform and mobile interface to its clients and state of the art call and trade unit for assistance to do trading with BSE and NSE. 5paisa is also an approved Research analyst by SEBI (Securities and Exchange Board of India), a depository participant under ‘Central Depository Services (India) Limited’(CDSL), and a registered member with AMFI.

‘5paisa’ provides a wide range of financial services to its customers like, distribution of mutual funds bonds, depository services, debentures Equity, and mutual fund research, through web-based technologies.

Products & Service

However ‘5paisa’ is a subsidiary to the ‘India Infoline Finance Holdings Ltd.’, which is a full-fledged brokerage company providing a wide range of financial products as well as advisory services, but if we talk about ‘5paisa’, then the company is discount brokerage firm operating and facilitating through digital means.

Traditional or Discount Brokers

There is a big difference between traditional brokerage and discount brokerage. Where discount broker as the name suggests provides financial services at discounted prices, most offering flat rates irrespective of trade amount or trade volumes, traditional brokerage provide all range of financial services and products along with customized advisory services and all kind of allied services like market analysis, tax advisory, wealth management services, depository services, market insights, and research, etc.

Where full-fledged traditional brokerage usually operates through physical workplaces and offices across the nation that incur operating costs like services manned by teams and highly paid qualified professionals, that add to administrative overhead and push up the price tag to their services, the discount broker runs their business on no fringe model by focusing only on core transactional services thus their offering rates are low compared to traditional ones.

Choose the Right

Before we talk about the company’s products & services, you must consider some facts before deciding to choose any brokerage at all. And the First question is whether you choose a discount broker or not, in the first place. It depends on your knowledge level and experience. If you are an experienced stock trader dealing in large volume then you can choose a discount broker because it will save you a lot of money as commissions, at least in long term, given discount brokers mostly charge flat rates whereas traditional ones mostly charge percentage-wise. If you have no experience and need advisory from proficient professionals of the field, then you can choose traditional brokerage as you are avail of all kinds of services and customized advice even in person, but these cost you.

Benefits with a Discount Brokerage

Discount brokers have now become synonymous with online brokerages. As operating fully online where overhead costs are much less as compared to physical means, most discount brokers charge flat rates and even some charge no commission at all on certain kinds of services. Where traditional brokerage companies have large chunks of high net worth individuals, these discount brokers are a popular choice among retail customers as you can do business with as low as Rs. 500/-.

‘5paisa’ facilitates various types of services to its customers with an all-in-one account such as ‘Stocks’,  ‘Derivatives’,  ‘Currency’, ‘Commodity’,  ‘Loan’,  ‘Mutual Funds’, ‘Gold’, ‘Insurance’ and ‘Wealth’. It has one of the best digital platforms and mobile app support to enable you to trade in your stocks as well as to do other trading activities such as peer-to-peer lending, mutual funds, insurance, investment in US stocks, etc.

• 20/- flat brokerage per order, and it comes down to Rs. 10/- with ‘Value Add Pack’, being lowest in the market
• Mutual funds: Rs. 0/- commission, no other charges, no conditions
• App support is robust with a one-stop solution for all investment, insurance, mutual funds, peer-to-peer lending, gold trading, US investment, etc.
• Research and advisory on 4000+ stocks, for Derivative strategies, short and long calls, portfolio-based investment ideas
• With ‘Value Add Packs’, you get the first 100 trades free every month and on subsequent trading, Rs. 10/- is charged

5paisa Brokerage Charges

Account Services

Trading & Demat Account

‘5paisa’ is the fastest growing discount brokerage company in India, offering trading and investment services in various categories including stocks, currency, and derivatives (Future & Options).

Need for a Demat Account

If you wish to trade or invest in the stock market, then you need a Demat account as well as an equity account. There is little difference between a trading account and a Demat account. While a Demat account is like a digital locker where you keep all your shares, mutual funds, government securities, bonds, etc., a trading account is needed in order to buy or sell them, i.e. to facilitate transactions.

‘5paisa’offers combined account for Demat and trading, which facilitates its customers to trade and invest in stocks along with to invest in mutual funds. But if you wish to have a separate mutual fund account only and not opt for trading & Demat then it’s available. ID required for opening any of such accounts is ‘Aadhaar Card’ and if your ‘Aadhaar Card’ is linked with your phone no., then the opening process is instant.

Listings

‘5paisa’ is one of the fastest-growing discount brokerage companies offering investing and trading services in various disciplines like stocks, Currency, derivatives (Futures & Currency), etc. ‘5paisa’ is a member of ‘Bombay Stock Exchange (BSE)’ and ‘National Stock Exchange (NSE)’, offering trading account, backed by technology and experience developed for over 20 years by its parent company, India Infoline Finance Holdings Limited (IIFL)’ in the retail broking industry.

‘5paisa.com’ offers trading services with simplified plans for brokerage rates and its customers can trade across different segments by choosing one of the company’s ranges of plans. Flat rate of Rs. 20/- per order is levied in Optimum Plan, which reduces to Rs. 10/-, if you opt for Platinum Plan and free Equity Delivery in Titanium Plan. ‘5paisa’ brokerage charges are flat instead of being percentage-wise (%) as of traditional broker, in long run is estimated to save you up to 90% brokerage fee.

‘5paisa’ trading account is integrated also with other financial products including, mutual funds, bonds, equity funds, insurance, etc.

Mutual Fund Account

Online Mutual Funds Investment Account, being a featured offering from ‘5paisa’ facilitates you to invest in mutual funds and you can open just a Mutual Funds Investment Account for zero charges.

‘5paisa’ offers SIP (Systematic Investment Plans), an investment option where you invest small amounts periodically instead of a large sum at one time, it also offers some protection from market fluctuations and volatilities of dollar rates.

The company offers an ‘Auto Investor’ tool free of charge that facilitates customers with online Mutual Funds advisory and helps you choose the right option based on risk assessment and return expectations.

Account & AMC Charges

Here is the charges list for opening an account with ‘5paisa.com’ along with Account Maintenance Charge (AMC) –

Plans Offered

Customers can choose one of the three plans available on ‘5paisa.com’. Charges are all flat and you don’t have to pay as a percentage (%) for the brokerage as with a traditional broker, even in ‘Basic Pack’ to avail, you range of services. Besides ‘Basic Pack’, there are available two other add-on packs too, such as ‘Power Investor Pack’ and ‘Ultra Trader Pack’. Details of ‘5paisa’ brokerage plans as of 2021 are such as –

Pros & Cons of Using ‘5paisa’

Advantages

• 20/- flat rate irrespective of trade amount/volume/exchange
• One account for all services like stocks, currency, commodities, mutual funds, advisory & research, etc.
• Free and fast and paperless account opening process (5 min approx)
• Lowest charges of DP
• MF account for free
• All-in-one trading app
• All free trading platform (mobile app/website/desktop trading terminal)
• Suggestions and research tools on stock trading
• Robo advisory and Algo trading services
• At affordable prices, technical, derivative, and fundamental research & advice to clients
• On e-mail and mobile technical calls
• Promoted by IIFL LTD., a big conglomerate having the in-field experience of over 20 years

Disadvantages

• No 3-1 account, only trading & Demat account combination
• High Demat debit transaction charges (Rs. 25/- or 0.025% in Optimum Plan)
• Higher transaction charges for exchange, compared to other brokers
• Call & trade is available, but only after you pay Rs. 100/-
• Research & Advisory is not available in the Optimum Plan
• ‘5paisa’ does not facilitate services to NRI trading 

Final Words

‘5paisa. com’ is a reliable and one of the best in the segment that offers competent brokerage services to its customers at affordable prices. During, from 2017 to the present, under ‘Bombay Stock Exchange (BSE)’ and ‘National Stock Exchange (NSE)’, ‘5paisa’ received less than 0.1% complaints about quality and reliability against total no. of its trading volume.

‘5paisa.com’ being one of very few brokers, offers 100% security to its clients of their holdings in Demat account and does not play as power of attorney. It got Rs.110 crore fund infusion through a rights issue in August 2020. The company already bagged more than 4 lakhs of clients in just 3 years period. Complaints against ‘5paisa’ are the lowest in the stock market. These facts may be sufficient for anyone considering joining it or recommending it.