Zerodha Coin Review
Zerodha has emerged as a leading discount brokerage firm which offers brokerage free equity delivery in India. It has provided various trading platforms for its clients to invest in future &options, commodity and currency. When SEBI issued a circular in which it has permitted all investors that via demat account investment can be done in mutual fund through exchanges then Zerodha came up with an impressive platform for its client that is Zerodha coin. Through this platform, an investor can invest directly in mutual funds that are termed as direct mutual fund investment plan.
Zerodha coin a unique platform where a client can directly purchase mutual funds from asset management industries through online mode and that too without paying any sort of upfront or trailing commission. When a mutual fund is purchased from a distributor then a client has to pay an upfront commission of 1.5% depending on the investment amount and a trailing commission of about 1.5% annually till the time an investor keeps his/her fund. But with Zerodha coin a client can purchase mutual fund through its demat account making it a convenient way to access all securities under one umbrella. Investment upto Rs 25000 can be done free of cost but thereafter a minimal charge of Rs 50 per month has to be paid without depending on the number of MF transactions and investment amount.
Motive behind Zerodha coin emergence:
It has been introduced so that the investors can easily make an investment in mutual funds through online mode in demat way as they do it while investing in securities by sitting anywhere even from home. This is a user friendly feature where an investor doesn’t have o pay any penny for the same.
Two ways through which an investor can invest in mutual fund:-
1.With the help of local distributors:-
There are third parties who work on behalf of their client which are known as distributors. These distributors do research for their clients to advice them which mutual fund is better for investment, complete all the formalities of documentation and then invest the capital of their clients in specific mutual funds. This tedious process is made smoother and time saver by these distributors but as we know that every coin has two sides same goes with them also.
In return of their service these distributors charge some commission from their investors. They charge 1.5% upfront commission which depends on the amount of investment made by an investor and then they continue it by charging 1.5% trailing commission per year which is extended till the time an investor keeps his funds invested with the distributor. All these commission reduces the return amount of an investor by taking over the large sum of their investment made.
Lets take an example, suppose an investor invests Rs 5000 per month for the duration of 5 years. Now assume that this investment gives around 15% return value every year. Then on calculating commission charges, the distributor will collect around 16500 as commission fee from their clients which will be added up every year cumulatively depending on the duration of the investment is kept. Due to this investors end up paying a large sum of money to their distributors unknowingly and face a heavy loss in their investments return value.
2. By taking help of fund house for investment:-
There are some fund houses such as Kotak securities focus fund, Reliance money fund etc. where an investor can directly invest in mutual funds without requiring any intermediate. But in order to invest in these fund houses, an investor has to either browse their respective websites or has to step in their branch office personally.
This process requires your time as an individual has to undergo registration process, fill up all the required documents by own and has to invest in his interested mutual fund accordingly. Moreover, an investor has to keep a complete track on the funds step by step. This whole process kills a lot of time of an investor.
How Zerodha Coin play its role:-
Removing all the above hurdles, Zerodha highlight itself through its Zerodha Coin platform. As an investor do their trade in various securities like equity, currency and commodity electronically through his/her demat account by using various Zerodha trading platforms. Similarly, they have to invest in mutual funds through Zerodha online portal named as Coin by using their demat system. Here they can purchase or sell mutual fund units digitally in a one click. Consolidated records of mutual fund units and other investments are available in the investors demat account which can be tracked easily. Zerodha doesn’t take any brokerage charge for this facility. Moreover, Zerodha Coin also shows the best functioning mutual funds along with their approximate return values.
Zerodha Coin Charges :-
If a client does his/her first investment of upto Rs.25,000 then no subscription fees are charged initially for using Zerodha Coin portal. But when the interest is accumulated from the next year and crosses the above amount then a charge of Rs.50 per month is levied by Zerodha irrespective of fund value which extends till the time client continues his investment plan.
SIP (Systematic Investment Plan) is a type of plan provided to the investors by mutual funds for mini investments and shorter duration that can last from weekly to quarterly. If SIP is done for Rs.5000 per month then till 5th month no subscription charges are levied but from 6th month charges start applicable of Rs.50 per month as above. But if an investor invests smaller amount in mutual funds such as 1000-2000 then charges will start applicable from the second year of investment according to 2.5% of the invested amount.
Way to reach Zerodha coin on the website:-
Start the process by visiting on coin.zerodha.com link. Then on the top at right hand side there is a login icon, click on that which will redirect you to Zerodha kite, type your id and password which will open up the Zerodha Coin dashboard. On reaching the dashboard choose the best mutual fund by tracking their returns, NAV, equity curve and then invest accordingly either using SIP or investing a bulk amount at a one go.
Pros and cons of Zerodha coin platform:-
Investment is done directly without paying a single penny on subscription charges.
Productive, systematic and cost-effective service.
User friendly, services can be initiated or halted according to user requirement and can be accessed from a one place.
Easy paperwork, if KYC is updated then account can be opened by providing adhaar details.
All investments can be tracked at a one place.
Not suitable for low investors as it will not give good returns.
Being a new feature it is not much trustworthy.
Performance and productivity can’t be speculated.