How Many Types of Charges Are Applicable On Demat Account?

Charges Applicable On Demat Account
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Demat account has made the procedure of investing and trading more convenient & cost-efficient. Read Charges Applicable On Demat Account.

Introduction

Demat account has made the entire procedure of investing and trading more convenient, more cost-efficient, and faster than ever. You can hold and track your financial security through a Demat account.

Having financial guarantees in digital form is safe. Just be free from any worry of damage to your stocks and other investment papers. 

Demat account is needed to start share trading as per the rules levied by the Securities and Exchange Board of India (SEBI). You need to connect with a Depository Participant (DP) to open a Demat account.

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You can store various financial securities, such as stocks, mutual funds, etc., in Demat Account. You can open a Demat Account from the comfort of your home and access it from anywhere through mobile or laptop.. 

There are some Demat account charges to be paid that you should know about. If you open a Demat and trading account, you can get the facility to trade in the stock market. Since trading requires you to pay brokerage, people often search for Demat account with low brokerage. Go through the article for details of these charges and ways to reduce them.

Demat Account Opening Charges 

Depository Participants (DPs) charge a nominal fee or no charges to open a Demat account. You can open two-in-one accounts (Demat Account and Trading Account) or three-in-one accounts (Demat Account, Trading Account, and Bank Account) for this nominal fee. Most brokerage firms, which are also the depository participants, offer free Demat and trading accounts to customers. 

Custodian charges 

This is a monthly fee charged by brokers based on the types and number of securities you own in your Demat account. Generally, it is in the range of Rs. 0.5 to Rs. 1 per share.

If you have shares of a company that has paid this fee to the depository, i.e., NSDL and CDSL, your broker will not charge any fee for such claims. Earlier investors had to pay a fee for both credits and debits to their Demat account. But now, most DPs do not charge for the credits to Demat accounts.

Annual Maintenance Charges

Investors have to pay a nominal amount to their DPs for the services rendered. You can open a Demat account with a broker offering a free Demat account without any Annual Maintenance Charges (AMC), at least for the first year of opening your Demat account. AMC charges vary from broker to broker. 

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Transaction Charges 

This is the fee for the financial securities that come in or go out from your Demat account. Each time there is a debit or credit of your deposits, you will have to pay a nominal charge. However, there are many DPS who charge for debited securities only. Many DPs charge it every month at a flat rate. And some payment is based on the number of transactions.

These are the four types of Demat account charges you should consider while opening brokerage accounts. 

A Demat account with low brokerage

To make stock trading more profitable, use a brokerage firm’s services offering lower brokerage rates and affordable subscription plans.

Choose the broker carefully. 

While choosing a depository participant to open brokerage accounts, you should consider the following points: 

  • Look for a broker offering a free Demat account.
  • The Annual Maintenance Charges (AMC) should be minimum. If it is open for the first year of opening brokerage accounts, it is valuable for investors.
  • Reduce the brokerage cost with a subscription-based plan.
  • There should not be a minimum deposit to be kept in Demat accounts.
  • Trading Platform associated with Demat Account should be advanced technically.
  • Customer service should be swift over the phone, email, chats. 

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