It is no longer possible to invest in the stock market without a demat account. Did you know that? Well, The Securities and Exchange Board of India (SEBI) made it mandatory in 2014. So, selecting a demat account that best suits your requirements becomes important.
1. Account types
There are two types of demat accounts: basic service accounts and full service accounts and charges vary account to the type of account you have. If you are a new user, you should opt for a basic service account. This will give you an idea of how the market functions. The biggest benefit of this account is that you will not pay any annual maintenance for transactions up to Rs.50,000.
On the other hand, a full service account offers various benefits to investors such as offering advisory services. Accordingly, charges for a full service account are higher.
There are two types of demat accounts: basic service accounts and full service accounts and charges vary account to the type of account you have. If you are a new user, you should opt for a basic service account. This will give you an idea of how the market functions. The biggest benefit of this account is that you will not pay any annual maintenance for transactions up to Rs.50,000.
On the other hand, a full service account offers various benefits to investors such as offering advisory services. Accordingly, charges for a full service account are higher.
2. Account opening charges
You can open a demat account with any depository participant (DP), such as banks, stock brokers or online investment platforms. Cost of opening an account may vary from one option to another. Most banks allow investors to open demat accounts free of cost. Stock broking companies and online investment platforms charge an account opening fee. The charge could range anywhere between Rs.250 and Rs.750. Although banks offer a benefit here, do remember that other charges will be levied down the line.
You can open a demat account with any depository participant (DP), such as banks, stock brokers or online investment platforms. Cost of opening an account may vary from one option to another. Most banks allow investors to open demat accounts free of cost. Stock broking companies and online investment platforms charge an account opening fee. The charge could range anywhere between Rs.250 and Rs.750. Although banks offer a benefit here, do remember that other charges will be levied down the line.
3. Annual maintenance charges (AMCs)
You have to pay a certain amount each year to maintain your account. This is an important factor to consider before choosing a certain option. Most DPs charge an AMC. However, a few tend to waive the charges for the first year and later charge on the basis of the number of transactions made in a year. Online investment portals tend to charge much lower AMCs than banks.
You have to pay a certain amount each year to maintain your account. This is an important factor to consider before choosing a certain option. Most DPs charge an AMC. However, a few tend to waive the charges for the first year and later charge on the basis of the number of transactions made in a year. Online investment portals tend to charge much lower AMCs than banks.
4. Brokerage charges
You pay for services rendered during the buying and selling of shares. Different DPs have their own brokerage fee models. In general, most brokers charge brokerage in percentage terms. For Sharekhan, the brokerage is 3 paise per 100 paise for each intraday transaction. The amount is 30 paise per 100 paise for delivery.
You pay for services rendered during the buying and selling of shares. Different DPs have their own brokerage fee models. In general, most brokers charge brokerage in percentage terms. For Sharekhan, the brokerage is 3 paise per 100 paise for each intraday transaction. The amount is 30 paise per 100 paise for delivery.
5. Services and charges
Many DPs offer a varied set of services to demat account holders. However, you must choose to pay for the services you need. Try to choose an option that is in sync with your trading requirements and is cost-effective in the long run. Always aim at finding all costs involved before opening an account, as there is no point in paying for services you will not use.
Many DPs offer a varied set of services to demat account holders. However, you must choose to pay for the services you need. Try to choose an option that is in sync with your trading requirements and is cost-effective in the long run. Always aim at finding all costs involved before opening an account, as there is no point in paying for services you will not use.
Opening a demat account is a necessity.
thanks for this
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