Know Which is Best Demat Account in India

So, you want to start trading in shares and open a Demat Account. How do you find out which Demat Account is best for you?

Before going into that, let’s understand what is a Demat Account. A Demat Account is a record of your holdings in the stock market. When you buy a certain quantity of shares of a company, there’s an entry in your Demat Account denoting the same. Similarly, when you sell shares, that too is reflected in your Demat Account. You need Demat Accounts since paper share certificates are no longer used.

Let’s Look At The Features Of A Top Demat Account

Account opening charges

This is not especially crucial, but you could save some money by opting for a depository participant (DP) – which could be your bank or stockbroker – that waives any opening account charges. If you look around, you'll find plenty of them offering free opening of accounts.

Additional Read: Features and benefits of a Demat Account

Annual maintenance charges

Annual maintenance charge is a charge you pay every year. Annual maintenance charge is what DPs charge in order to meet the operating costs involved in a Demat Account. The charges can range anywhere between Rs 400 and Rs 800 depending on the DP concerned. If you don’t carry out a lot of transactions on the stock exchange, you can opt for a basic services Demat Account, for which there are zero charges if the value of the holdings is below Rs 50,000, and Rs 100 for amounts up to Rs 2 lakhs.

Transaction charges

You should look closely at the transaction costs since this is a charge per transaction. These charges could be a fixed charge per transaction or could be a percentage of trade value. Few brokers don’t charge for these transactions.

Additional Read: Everything You Need to Know About Demat Account Fees and Charges

Quality of service

Another thing to look for is the quality of services. Choose a DP with a countrywide network of branches or a dedicated online service team. The chances are that the quality of service would be better since larger organisations set up customer service networks devoted to their customers.

Bank or broker

You have the choice of choosing a bank or stockbroker as your DP. Few banks and stock brokers offer accounts that combine banking, trading and Demat facilities. The entire process of buying and selling shares, paying for them and getting transactions entered into the Demat Account becomes seamless.

Conclusion

You can choose a Demat Account by keeping in mind the points that we have discussed above. However, there is no straight answer; you need to weigh the pros and cons of the available options and choose the one which suits your requirement.

Additional Read: Dos and Don'ts for a Demat Account

FAQs

   1.  Which Demat Account is best for investing in stocks?

There are different kinds of Demat Accounts available in the market such as ones with zero opening charges, basic services Demat Account, 3-in-1 accounts with Trading, Demat and Savings account facilities, and ones with fixed and per-trade transaction charges. There is no way to say which one is best, but you can choose a Demat Account that is best for you. Keep in mind the different requirements you have and choose an account that suits your needs.

   2.  Which is the best Demat Account for beginners?

Novice traders are often confused about which Demat Account to open, given that there are plenty of options in the market. For beginners, a Demat Account with low trading charges is a good option to consider, since you will probably not be making high-value transactions. A basic services Demat Account could also suffice. Take note of the kind of transactions you will do and then choose an account accordingly.

Disclaimer: The contents herein mentioned are solely for informational purpose and shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.