How do brokerage fees affect my overall stock returns?

Brokerage fees reduce your overall stock returns because they are charged on every buy and sell transaction. Even if your stock performs well, high brokerage can eat into your profit. That’s why choosing a broker with low or zero charges is very important to boost your net gains.

What Are Brokerage Fees?

Brokerage fees are the charges you pay to your stockbroker for every transaction—whether you’re buying or selling stocks. These fees can be flat or percentage-based, and they are deducted regardless of whether your trade makes a profit or loss.

Even a small fee may not look like much on one trade, but over multiple trades, it adds up and reduces your total returns.

How Do These Fees Reduce Returns?

When you buy a stock, brokerage is charged. When you sell it, it’s charged again. This means your cost goes up twice. So, if your profit is ₹1,000 and you paid ₹300 in brokerage, your real return is only ₹700. That’s a big cut!

• Frequent Trading: More trades = more fees = less return.
• Small Profit Trades: Brokerage can wipe out small profits.
• Loss-Making Trades: You still pay brokerage even on loss trades.

Why Low Brokerage Brokers Matter

If you want to keep more of your stock returns, choosing a broker with low or zero brokerage is a smart move. For example, Angel One offers zero brokerage on delivery trades and minimal charges for intraday and F&O segments.

This helps traders and long-term investors boost their profits by reducing unnecessary costs.

Example to Understand Better

Let’s say you buy shares worth ₹50,000 and sell them later for ₹55,000. Your profit is ₹5,000. But if brokerage is ₹250 while buying and ₹250 while selling, you’ve paid ₹500 total. Your actual profit is now ₹4,500, not ₹5,000.

If you make 10 such trades in a month, that’s ₹5,000 paid in brokerage. Over time, this reduces your overall wealth.

Brokerage fees are one of the most ignored factors while investing, but they can make a huge difference to your final returns. Choosing a low-cost broker like Angel One helps you protect your profits and build wealth more efficiently. Always track charges and reduce them where you can—it’s one of the smartest money habits in the stock market.