Zerodha only broker in India to charge ₹200 to open a demat account; here's why

livemint.com:

₹200 to open a demat account. In its update, Zerodha explains why it has kept the account opening charge at a nominal rate. ‘’There is an actual cost (KYC, documentation, eSign, human verification, etc.) that is incurred while opening an account.

If there was no account opening fee to recover the cost, the business could implicitly be pressured to get a customer to transact to recover that cost,'' said Zerodha in its update. The broker adds that this is not good for the customer or the business in the long run if a customer transacts due to a push from the broker, which causes the customer to lose money. ‘’Any attempt to explicitly recover this cost could also mean compromising on the many core principles at Zerodha, like the no-spam policy, no revenue targets for the team, and more.

This is also why we don’t spend on advertising,'' said Zerodha. Trading the markets is a serious business with serious risks involved, said the broker. Collecting an account opening fee right at the start also, in a way, helps set this expectation with a potential customer, filtering out users who may not be serious about trading or investing with the broker, according to Zerodha.

Zerodha Founder and Chief Executive Officer Nithin Kamath took to X, formerly Twitter, sharing how it took him six years to get the first 60,000 customers and the number increased to one crore in the next six years owing to the digital infrastructure. "It took us 6 years to get to our first 60k customers, each of whom had to sign and courier 40+ pages of forms and wait for days. We got to 1 crore customers in the next 6, entirely eliminating paper in the process.