When it comes to trading and investing in the Indian stock market, having a demat account is compulsory. The brokers provide various types of services to attract customers and make the task of investing in the stock market an easier activity. In this article, we will learn about the Basic Service Demat Account.
Firstly, let us learn what is a Basic Service Demat Account?
What is a Basic Service Demat Account?
The small investors who are unable to invest regularly in bonds, stocks, ETFs, etc. Basic Service Demat Account is for their use. With this account, they get the benefit of reduced opening and maintenance charges.
Let us now understand why the requirement for Basic Service Demat Account was felt.
Why Basic Service Demat Account?
Basic Service Demat Account was introduced by the Securities and Exchange Board of India (SEBI). When SEBI realised that a maximum number of demat account holders do not operate their accounts as much as they should and still pay higher maintenance charges, this account type came into existence. Only those users who have a single Basic Service Demat Account across all the depositories can avail the benefits of this account.
Let us now learn about the charges of Basic Service Demat Account
Charges of Basic Service Demat Account
When you open a demat account, you must be aware of the various charges. Since Basic Service Demat Account is meant to provide benefit to the small investors, the charges are comparatively lower than the normal demat account. When you open the Basic Service Demat Account, the annual maintenance charges depend on the value of your holdings on a slab basis.
For debt securities, there are no annual maintenance charges for holdings up to Rs. 1,00,000. For holdings between Rs. 1,00,000 to Rs. 2,00,000, the annual maintenance charges are Rs. 100.
Likewise, for non-debt securities, there are no annual maintenance charges for holdings up to Rs. 50,000. For holdings between Rs. 50,000 to Rs. 2,00,000, the annual maintenance charges are Rs. 100.
Moreover, if you hold a combination of debt and non-debt securities, you do not have to pay annual maintenance charges up to Rs. 1,50,000 (i.e. Rs. 1,00,000 for debt securities and Rs. 50,000 for non-debt securities) or pay Rs. 100 annual maintenance charges up to Rs. 4,00,000 (i.e. Rs. 2,00,000 for debt securities and Rs. 2,00,000 for non-debt securities)
The above mentioned are a few things that you must know about a Basic Service Demat Account. If you want to open a free demat account, you may consider contacting Kotak Securities to avail their premium and hassle-free services.