How can I get a free demat account?
If you are interested in investing in shares, you need to get a demat account. For this you will have to go to a depository participant (DP), which could be a stockbroking firm or a bank.
You will be able to get a free demat account with many of the DPs since they waive charges in order to attract customers. So it’s always best to look around first before you open a demat account. When you can open a demat account with zero charges, why pay extra?
Of course, you must remember that while account opening may be free, there are other costs that you may not be able to avoid. There are two such costs: one is annual maintenance charge, and the other is transaction charges.
The annual maintenance charge is a fixed fee that you have to pay each year. This could range between Rs 300 to Rs 800. Many DPs also waive annual maintenance charge for a limited period of time, like a year, as an introductory offer to new clients.
Another fee is the transaction charges, which is charged per transaction. Usually, this fee is applicable when you sell securities, and not when you buy them. Few brokers don’t charge clients for these transactions too. Otherwise, his charge is a small percentage of the value of the transaction or could be a fixed charge of around Rs. 15 to Rs. 20. Some DPs also charge a fixed fee per month instead of per order charges.
Basic services demat account
If you invest only small sums in the stock markets, do you have an option to reduce your demat costs? Yes, you do. The Securities & Exchange Board of India (SEBI), in order to safeguard the interests of small investors, issued guidelines instructing DPs to open basic services demat accounts that offered reduced rates. If you open such an account, you will not need to pay any annual maintenance charge if your equity holdings are under Rs 50,000. If your equity holdings are up to Rs 2 lakh, you need to pay only Rs 100. For debt securities, there will be no charge for holdings up to Rs 1 lakh.
How to open a demat account
You can open a demat account at any stockbroking firm or bank that is also registered as a depository participant. All you need to do is fill the account opening form and complete the KYC formalities through your Aadhaar number or Digilocker facility offered by the Government of India. Since most reputed DPs today waive charges for it, you can get a free demat account in no time at all. It’s always better to have a demat account since you will need it to buy shares and also to invest in certain debt instruments.
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.