Fintech Battle Royale

Since the pandemic broke out a year ago, many people have tried their hand at trading and mutual funds. Pandemic-driven restrictions and job losses that left millions of people at home with little to do, coupled with the rise of social media channels and influencers with tips for stocks, has fuelled this unprecedented growth. Millennials are driving the majority of this boom as youngsters explore more hobbies at home. Firms like Zerodha, Groww, and Upstox have now become household names, thanks to word-of-mouth marketing and extensive advertisements. Intrigued by this rapid growth, we wanted to analyse the pros and cons of each platform to recommend the most suitable option for a newbie.

In this comparison post, we focus on Zerodha, the established leader and Groww, a fast-rising player, which we covered in this post.

Zerodha pioneered the discount broking model in India. As of March 2021, it boasts a 19% share of the active client base, which is twice the market share of the next most popular broker. Clients on Zerodha are responsible for almost 15% of all Indian retail trading volumes.

On the other hand, Groww began as a platform for mutual funds but has rapidly added the ability to transact various other financial instruments.

The onboarding procedure for both platforms are similar and hassle-free: One can register by supplying some basic details, one’s Aadhar number, PAN number and a signature. This frictionless e-KYC process has been crucial in driving the growth we have witnessed over the last few years.

In addition to a few hundred rupees (depending on the type of account) as account opening charges, Zerodha also charges Rs. 300 per annum as DEMAT account maintenance charges. On the other hand, Groww is completely free! However, for someone who is planning to invest a moderate sum, these charges may turn out to be negligible in the long run.

The web/mobile UI for both platforms is elegant and designed so that newbies can find their way around in no time. Trends in the form of line, candlestick and other charts show price movements and historical performance in an elegant manner. 

Security-wise, both platforms are guarded by the most secure technologies and practices, such as 128-bit SSL on Groww and Two Factor Authentication on Zerodha. As a result, users can safely transact without worrying about fraud and other malicious attacks.

As far as stocks are concerned, both platforms offer the ability to trade on NSE and BSE. One can also trade commodities on the Multi Commodity Exchange (MCX) via Zerodha, a feature that is missing from Groww’s platform (though one can trade digital gold on Groww). Equity delivery is free on both platforms, while charges for intraday equity trading are almost similar for both platforms: flat Rs. 20 or 0.03%/0.05% (whichever is lower) for Zerodha/Groww, respectively.

Zerodha offers a host of features that are not available on Groww. To name a few: trading for NRIs, a diverse set of order types (GTC, cover order, etc.), higher margin for equity intraday trading, and algorithmic trading. Zerodha also offers a suite of services under the Zerodha Universe for augmenting the trading and investment experience. These include smallcase, a platform that is designed to help you capitalise on a theme or trend and Streak, an algorithmic trading platform that helps you create, backtest, and deploy algorithms live in the market without coding.

Meanwhile, Groww offers users the ability to invest in US stocks and Fixed Deposits, which is missing from Zerodha’s offering.

Both platforms offer trading and investment advice. Zerodha’s Varsity is a complete in-depth guide to the world of investing and trading. It is a comprehensive step-by-step guide for a newbie. On the other hand, imparting financial education has been one of Groww’s aims since its inception. Groww’s current offering is in the form of a blog with introductory articles on stocks and mutual funds and regular updates on the current state of affairs in the world of finance. They also provide a range of calculators for estimating your returns after investing your capital in various markets.

Both platforms offer an extensive range of commission-free mutual funds. Zerodha’s Coin lets you buy direct mutual funds online with no commission passback, directly from asset management companies. Groww’s user interface for mutual funds is slightly more user-friendly: discovering, filtering, and comparing funds is seamless. Also, Groww recently acquired Indiabulls AMC, thereby signalling a more substantial presence in the Mutual Fund space. It will be exciting to see how they benefit from this acquisition.

Verdict: For someone looking to dip their feet in the world of trading for the first time, Groww might be a better option owing to their super-simple UI and zero upfront charges. On the other hand, with a wide range of features and tools for analysis, an experienced investor or someone planning to go long might want to consider Zerodha.