There are hundreds of brokers in India offering different kinds of broking and other financial services. There are two categories of brokers, the discount brokers and full-service brokers. It is necessary to understand the difference between discount brokers and full-service brokers to understand which broker discount or full service could be best for you.Discount Brokers

Brokers like RKGlobal, Zerodha, Tradegenie etc comes in the category of discount brokers. They charge less brokerage and offers limited types of service.  These brokerages houses will generally not offer investment advice and don’t have research department. With a discount brokerage, you can either execute a trade online yourself or can place order on phone. Although they charge you extra for placing order on phone.

Discount brokerage firms in India mainly offers

High speed trading terminal
High speed order execution systems
DMA
Shared servers for co-location.
Basic backoffice as per law
ECN
Call and trade
Email support

Full-service brokerages offer following

1. IPO investments
2. Stock buy and sell in cash market
3. Bonds buy and sell
4. Mutual funds buy and sell
5. Annuities
6. Insurance (health, life, term, investment)
7. National Saving Certificates, Kisan certificates
8. Margin funding for IPO
9. Margin funding for stock trading
10. Margin funding for FNO
11. Loan against gold (under different name)
12. Loan against stocks
13. Research reports on fundamentals
14. Research reports on technicals
15. RM
16. offline and online trading
17. PMS for stocks
18. PMS for mutual funds
19. Wealth management
20. Commodities
21. Private equity
22. Investment advisory
23. Trading calls for multiple market segments and different time frame – intraday, short term, long term
24. Demat
25. ECN, good backoffice and software to manage assets
26. Call and trade
27. Funds transfer from almost all banks
28. Facility to trade in all exchanges in India
29. Facility to trade in all major global exchanges
30. Forex trading in local and international markets
31. SLB

The above list is very big, some of the services might not be offered by some full service brokers.

Pros and Cons of discount broker

The only good thing about discount broker is that they charge very less brokerage fees. There are many cons of them. They don’t have offices everywhere you have to do paper work through courier. Although you don’t need it much. In cases like, company issuing right issue and you want to subscribe it you have no other option than sending papers by post.

They don’t offer investment options like IPO, Bonds, NCD, Mutual funds etc. They don’t offer PMS service.

They don’t provide much leverage. The margin limit they provide is less and is also limited to certain group of stocks only. You can’t do BTST kind of trade in every group of scrips.

Discount or Full service broker which one is best for you 

If you are more a trader specially FnO trader who can manage things on your and doesn’t requires much online or offline support from broker then you can go with discount brokers. FnO traders can do lot of saving with discount brokers. If you are an equity trader or investor who is also interested in IPO , bonds, MF, NCD etc then I would suggest to go with full service brokers.

If you trade with good amount you can negotiate with your broker to offer you low brokerage most probably your broker will  accept it. You can most probably get nearby same brokerage structure like discount brokers. Also there are many hidden charges with discount brokers which are not generally known like they charge more AMC, phone trading charges, more DP charges etc.