Everything About Demat Account Charges and Fees

A Demat Account gives you the convenience of managing your shares and transactions from any location. Before applying for a Demat Account, you should be aware of the various charges associated with it. Generally, these Demat charges are nominal.

What are the different types of Demat Account Charges?

  • Demat Account Opening Charges:  To open a Demat Account online, an association with a registered Depository Participant (DP) is necessary. A DP is a brokerage firm or a bank that holds securities. They also offer the option of opening a Demat Account with them. The Depository Participant will require nominal opening charges to open a Demat Account online. Some Depository Participants give the option of opening a Demat Account free for a year and then charging you for the following year. You have the option to choose the Demat Account that best suits your financial needs.

  • Demat Account Maintaining Charges: Along with the opening Demat charge, you will also have to pay an annual maintenance fee for your Demat Account. These charges are nominal and can range from 300-800 rupees. The amount will depend on the Directory Participant and the value of the transactions you make in a year.

    If you are a small investor, you can waive off the annual maintenance charge. The Securities and Exchange Board of India (SEBI) has defined a particular Demat Account for small investors with a balance of Rs.50,000 or less. It is called Basic Services Demat Account (BSDA). If you have a BSDA, you can waive off the annual maintenance charge.

  • Demat Transaction Charges: Your Depository Participant will also charge a nominal fee for transactions. The charge is for the different services the DP provides you. This charge is associated with every transaction you make with your Demat Account. Each time securities go in or out from your Demat Account, a transaction occurs. Some DPs will take the transaction charges monthly. Buying or selling can incur different transaction charges. Some DPs will only charge the transaction fee when you sell securities.

  • Demat Account Safety Charges: Before the conception of Demat Accounts, traders had to hold their paper-based Security certificates. The burden of responsibility for the safety of these physical papers was on the traders. These days, with the advent of Demat Accounts, the depository participant holds the securities for the trader. For the safety of these securities, DPs require a small Demat Account safety charge. The charge is dependent on the number of securities held by the trader. Typically, DPs charge safety fees every month. The fee amount can range from 0.5-1 rupee for each International Securities Identification Number (ISIN).

    Can you reduce the Demat Account Charges? 
    While there is no substantial way to reduce the charges, you can do these few small things:
  • Open a Basic Services Demat Account (BSDA). You can waive off the maintenance fee with this account.
  • Sign up with a brokerage firm that offers discount plans.

    To learn more about Demat Account charges or to apply for a Demat Account at HDFC Bank, click here.

    Interesting in DIY investing? Here’s how you can go about it! Click here to read more!

    *Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any/refrain from any action..