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HomeExclusiveDemat Account Investment Costs: An In-Depth Fee Breakdown

Demat Account Investment Costs: An In-Depth Fee Breakdown

There has been a steady increase in the number of investors in the stock market and mutual funds. It is necessary to have a Demat Account to invest in the stock market or mutual funds. You cannot invest without a Demat account.

According to media reports, after Kovid-19, there has been a steady increase in the number of Demat accounts. According to a recent report, the number of Demat accounts has crossed 10 crores.

If you also invest in the stock market, then do you know what is the investment limit in a Demat account? How much amount can you deposit in a Demat account and how much annual charge has to be paid on it.

What is a Demat Account? 

Demat account is a type of account. It works just like a bank account. The only difference between a bank account and a Demat account is that money is deposited in a bank account, whereas financial security is deposited in a Demat account. Through a demat account, you can easily buy and sell stocks, mutual funds, bonds, etc.

Demat accounts are managed by Indian depositories such as Central Depositories Services Limited (CDSL) and National Securities Depositories Limited (NSDL).

Users get two types of demat accounts. The first is the Basic Service Demat Account (BSDA). In this, you can invest up to Rs 2 lakh annually. The second is the Full Service Demat Account.

How much is the charge in BSDA

SEBI started the Basic Service Demat Account in the year 2012. The purpose of this account is to attract small and retail investors towards investment options like stock market and mutual funds. Investors can also invest in ETFs through this.

To manage BSDA, investors have to pay Rs 100 annually and GST fee. If an investor invests more than Rs 2 lakh annually, his account will automatically be converted into a full service demat account.

There is no investment limit in a full service demat account. The investor has to pay about Rs 1000 plus GST annually on this account. In this account, the investor gets access to all types of investments.

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