Zero Forex Guide 2025: Cut Card Fees & Trading Costs Completely

What is "Zero Forex"？

　　Everyone wants to save money on foreign currency transactions. You've probably heard the term "zero forex" before.

　　This marketing phrase can be confusing because it means two different things. What it means depends on whether you're spending money abroad or trading it.

　　For travelers, "zero forex" means cards without foreign transaction markup fees.

　　For traders, it means brokerage accounts offering a "zero spread" on currency pairs.

　　This guide covers both concepts. We'll first explain how to eliminate fees on international spending. Then we'll explore forex trading, focusing on how forex trading in Zerodha works for the Indian market.

Part 1: Zero Markup Cards

What is Forex Markup？

　　Most bank-issued credit and debit cards charge a forex markup fee. This hidden charge typically ranges from 1.5% to 3.5% and is added to the currency conversion rate.

　　A 3% markup fee costs you an extra ₹3,000 on a ₹1,00,000 transaction. That's a big cost just for using your money in another currency.

The Zero Markup Power

　　Zero forex markup cards eliminate this fee completely. They convert your transaction at the base exchange rate from Visa or Mastercard without adding their own commission.

　　The savings add up quickly.

The "Zero" Myth

　　The "zero markup" benefit is real. But you need to look at the whole picture. Many cards have other costs that can wipe out your savings.

　　Here's what to watch for:

• 　　Annual Fees: Does the card have a high annual fee？ A ₹3,000 annual fee could cancel out savings from one international trip. You must consider your usage to see if the benefit is worth the cost.

• 　　ATM Withdrawal Charges: Even with zero forex markup, taking cash from an international ATM often costs ₹300 to ₹500 per transaction, plus GST.

• 　　Dynamic Currency Conversion (DCC): This is a common trap for travelers. When using your card abroad, the payment terminal might ask if you want to pay in INR or the local currency.

　　Always choose the local currency when paying abroad. If you choose INR, the merchant's bank will convert the currency at a poor rate. This bypasses your card's zero forex benefit.

• Joining Fees & Rewards: Look at the joining fee and reward points offered. Sometimes a card with a low markup but great reward points is better than a zero markup card with high fees and poor rewards.

Part 2: Zero Spread Brokers

What is a Spread？

　　In forex trading, the "spread" is the small difference between the buying price and the selling price of a currency pair.

　　It's like a currency exchange booth at the airport. They buy dollars from you at one price and sell them at a higher price. That difference is their profit – the spread. Brokers make money this way too.

How "Zero Spread" Works

　　A "zero spread" account aims to eliminate this difference. It offers prices directly from the liquidity provider. The buy and sell prices are almost the same.

　　These brokers make money through a fixed commission on every trade you place.

　　You're trading a variable, spread-based cost for a fixed, commission-based cost.

Is "Zero" Always Zero？

　　The term "zero spread" is more marketing than reality. Spreads change with market conditions.

　　During news events, high volatility, or low liquidity times, the spread on even a "zero spread" account can widen a lot.

　　What brokers call "zero" is often the minimum possible spread under ideal conditions. The average spread over a day better reflects your actual costs. Always look for average spread data when choosing a broker.

Part 3: Forex Trading in Zerodha

The Number One Rule

　　Before trading, understand the legal rules for forex trading in India. This is essential and strictly governed by SEBI and the RBI.

　　Important: As an Indian resident, you can only trade in currency derivatives - Futures and Options contracts. These trades must happen on recognized Indian exchanges like the NSE. The currency pairs must involve the Indian Rupee (INR). Trading international spot forex pairs (like EUR/USD) on overseas platforms is not allowed under the Liberalised Remittance Scheme (LRS) and breaks FEMA regulations.

What You Can Trade

　　On Zerodha, you trade regulated, exchange-traded currency derivatives. This provides a safe and compliant environment.

　　The main currency pairs available are:

• USD/INR (US Dollar / Indian Rupee)
• EUR/INR (Euro / Indian Rupee)
• GBP/INR (British Pound / Indian Rupee)
• JPY/INR (Japanese Yen / Indian Rupee)

　　Options contracts are most liquid and mainly available for the USD/INR pair.

Deconstructing Zerodha's Costs

　　Is forex trading in Zerodha an example of "zero forex"？ The answer is nuanced. The brokerage is very low, but the total cost isn't zero.

　　The main benefit of trading with Zerodha is not zero cost, but transparent and very low fees. You know exactly what you're paying on every trade.

　　Here's a breakdown of costs for a sample currency futures trade.

　　While the brokerage is just ₹20, other charges add to the final cost. This transparent structure is a key feature of regulated trading in India.

How to Get Started

　　Activating currency trading on your Zerodha account is straightforward.

　　The process is simple and quick for existing users.

• Log in to your Zerodha Console dashboard.
• Click on your account profile in the top right corner.
• Navigate to the Segment Activation section.
• Select "Currency" from the list of segments to activate.
• Upload your income proof. This can be a recent bank statement, ITR acknowledgment, or demat account holding statement.
• E-sign the application using your Aadhaar.

　　Activation typically takes 24 to 48 hours. You'll get a confirmation email when the currency segment is active.

　　

Conclusion: Making Your Choice

　　

Spender vs. Trader

　　"Zero forex" serves two different needs. Your path depends on your goal.

　　If you're buying coffee in Paris or shopping online internationally, you need a Zero Forex Markup Card to save on conversion fees.

　　If you're speculating on the future price of USD against INR, you need a low-cost platform for currency derivatives trading, like Zerodha.

　　

Your Final Checklist

　　Use this simple checklist to make the best financial decision.

　　For International Spending:

• ✅ Look for cards advertising "Zero Forex Markup."
• ✅ Check the annual fees, joining fees, and ATM withdrawal charges.
• ✅ When paying abroad, always choose the local currency.

　　For Forex Trading in India:

• ✅ Understand you'll be trading INR-based currency futures and options.
• ✅ Choose a SEBI-regulated broker authorized for currency derivatives.
• ✅ Analyze the broker's full cost structure, including brokerage, transaction charges, and taxes.

　　By understanding what "zero forex" really means, you can navigate international finance with confidence and make smart decisions that save money.