How Zerodha make money by offering free Mutual Funds?

Many people ask about how Zerodha makes money by offering Free Mutual Fund. Majority of Zerodha revenue comes from derivatives trading. By offering free services like MF's, Zerodha attract many large traders and investors who eventually pay by using it's stock and derivates trading services.

Zerodha earn small interest from the money you keep in your trading account for few days before you buy stock or mutual funds. Zerodha keeps your money into bank FD's and earns interest in it.

For example, if you keep Rs 1 lakhs in your trading account for 1 day, Zerodha earn Rs 19.18 interest on it (at the rate of 7% annual interest).

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