Demat accounts in the online trading system allow individuals to access numerous opportunities available in the stock market and make investing and trading hassle-free. An aspiring investor or trader needs to open demat account with a brokerage firm. Every individual should be prudent while entering the stock market. One important aspect to know about is the demat account charges that investors need to pay to stockbrokers.
Different Demat Account Charges
1. Account opening charges
They offer a basic service demat account (BSDA) and a regular demat account option. You can choose a basic demat account if you want to invest a limited amount. Generally, a basic demat account is free of cost with every stockbroker. For a regular demat, they may or may not charge the account opening fee. In a basic demat account, you can hold securities worth Rs.2 lakh at a point in time. If you want to be an active investor, you can open a regular demat account. With renowned discount brokers, you can choose a subscription-based brokerage plan and open online demat and trading accounts for free.
2. Demat account maintenance charge
Stockbrokers charge a maintenance fee on an annual basis as they maintain your new demat account and securities in it. Reputed discount brokers with subscription plans benefit their clients by waiving off these maintenance charges for the first one or two year/s. After this period, the broker will charge the fee as applicable based on your chosen brokerage subscription plan. If you open a basic demat account, you can waive off maintenance charges completely if the balance in the basic demat account is below Rs 50,000.
4. Demat debit and credit charges
Whenever you buy financial securities, your demat account is credited to your demat account, and when you sell your demat securities, they are debited from your demat account. For this safe transfer from the buyer to the seller or vice versa, brokers charge a minimal fee for this security transfer. Some brokers charge only for the debit.
5. Transaction fees
Stockbrokers charge a transaction fee to execute a trade on the stock exchange. Some brokers levy demat transaction charges based on the volume of transactions, while others charge a flat transaction fee on a monthly basis irrespective of trade value.
6. Pledge/De-pledge Fee
Day traders can lien their securities in the demat account to avail of a margin trading financing facility from the broker. As they are pledging their securities, the broker will charge a pledging fee. When you de-pledge your securities after squaring off their position, then also traders need to pay a fee. However, this is the case for experienced individuals in the stock market who can trade using the MTF facility. This fee may vary by brokers.
How can you reduce demat charges?
One sure-shot way to reduce the demat charges is selecting a reputed discount brokerage to open demat. They offer subscription brokerage plans at competitive costs. You can choose a plan based on your knowledge of the market. There are basic plans for beginners for which they charge a nominal flat fee. They have professional plans for frequent traders who can save significantly with low trading account charges in the plan.
Thus, new investors in search of the best demat and trading account can consider reputed and reliable brokerage firms that allow you to open a demat account following a 100% digital process.
Simple steps to enjoy their low-cost demat services are as follows:
- Access the online application at the official website of the discount broker, or you can download the trading app.
- Enter your details like name, address, etc.
- Upload scanned copies of your ID proof, address proof, and PAN card.
- Submit your application accompanied by the required documents.
- The discount broker will verify your details and documents and activate your trading account.
You will get your unique demat account ID and log in details to start your investing journey in the stock market.