Definition
A discount broker is a stockbroker that offers trading and investment services at a significantly lower cost compared to traditional full-service brokers. Discount brokers usually operate online or through mobile apps. Unlike full-service brokers, they generally do not provide personalized investment advice, detailed research reports, or a dedicated relationship manager, focusing instead on giving investors direct access to the markets at low cost.
Example
You want to buy shares worth Rs 50,000. A discount broker might charge a flat fee of up to Rs 20 per trade regardless of whether you're buying Rs 50,000 or Rs 5,00,000 worth of shares.
Caution
Discount brokers may offer lower trading costs, but they generally provide fewer personalized services than full-service brokers. Investors should understand the available features, charges, and support before choosing a broker.