No, Zerodha's MTF interest rate is currently fixed at 0.04% per day (approximately 14.6% per annum) with brokerage at ₹20 or 0.3% (whichever is lower) per executed MTF order. Similar to how we offer the same brokerage plan irrespective of your trading volumes, we maintain standard interest rates for MTF across all clients.
Other brokers may offer you lower interest rates, but they compensate with uncapped percentage-based brokerage fees on your MTF trades, resulting in higher overall costs for you.
Cost comparison example
Here's an example with a ₹10 lakh MTF position held for 7 days:
Buy at ₹1,000, sell at ₹1,050 (1,000 shares) with a gross profit of ₹50,000 (₹50 per share × 1,000 shares)
Other brokers (lower interest + higher brokerage):
- Interest: 9.8% per annum = ₹1,879 for 7 days
- Brokerage: 0.1% (no cap) = ₹1,000 (buy) + ₹1,050 (sell) = ₹2,050
- Total costs: ₹3,929 (Interest + Brokerage)
- Profit: ₹46,071 (₹50,000 gross profit - ₹3,929)
Zerodha's pricing:
- Interest: 14.6% per annum = ₹2,800 for 7 days
- Brokerage: ₹20 per trade (buy + sell = ₹40)
- Total costs: ₹2,840 (Interest + Brokerage)
- Profit: ₹47,160 (₹50,000 gross profit - ₹2,840)
While the interest rates may appear higher with Zerodha, the capped brokerage structure keeps your overall MTF costs lower and predictable, unlike percentage-based models with no cap, where your costs increase with trade size and frequency.