Demat account is the entry pass to the fascinating world of the stock market. You need to have a demat account if you want to invest your money in the Indian stock market and avail the benefits. But do you get it for free or does demat account have charges too? Well, it does, so let’s have a look at the list of charges for demat account.
As the popular saying goes, “there is no such thing as free lunch”, benefits of demat account also come with a cost. Although there are many brokers who have made an effort to minimize the demat account charges that you have to pay, still the whole idea is that they cannot be completely waived off.
So, let us look at some of the charges for the demat account.
Demat Account Charges List
Ever since the demat account was introduced in 1996, the stock market journey has become smoother for everyone. To keep everything in check and maintained, there are certain demat account charges that are levied by your stockbrokers.
It is clear that you need to open a demat account when you want to start your stock market investment journey. You have to pay demat account opening charges to your brokers in order to get the services started.
The charges for demat account opening process can range anywhere between ₹0-₹500. Initially, there were not many stockbrokers and there were definite and high account opening fees on your demat accounts. But, with the increase in the number of stockbrokers and the growing competition, a lot of stockbrokers now let the individuals open a demat account for free.
For example- ICICI Direct lets you open a demat account for free and gives you the benefit of its smooth services, ease of trade, and customer-centric approach.
And even if there are some charges, they are almost negligible. In addition to this, the demat account opening process is also a smooth process and now can be completed either online or offline within a few minutes.
Demat accounts are a storehouse for your securities and shares. Since everything is in a digitalized form, the demat accounts have to be maintained and regulated properly so that there is no mishap.
The brokers thus levy certain AMC or account maintenance charges. These are some of the important charges for a demat account and charges can range anywhere between ₹0-₹3000 depending on your stockbroker or the plan that you choose.
Your stockbroker can levy these charges on a monthly, quarterly, or generally on an annual basis.
Nowadays, a lot of stockbrokers have waved off the AMC charges for the first year. This has become more convincing and comfortable for the stock market investors.
Earlier the shares were stored in the physical format and it was very difficult to keep them safe and maintain them. With the advent of technology and digitalization, demat accounts were introduced to keep your shares safely in a digitalized form.
And later SEBI made it mandatory that only the digital form of shares can be traded in the stock market. Therefore, all the physical shares had to be converted into digital form if you wanted to trade them.
The process of converting physical shares into digital format is known as dematerialization and the fees that you have to pay for the same are known as demat charges.
These charges are usually levied per certificate or per request and can vary from one broker to another.
The process of converting digital shares into physical form is known as rematerialization. Your broker will charge you certain fees for this as well. These are known as remat charges.
Every broker can charge according to their own plans and these charges can differ according to the number of shares or per 100 shares as well.
Stamp Duty Charges
According to the Stamp Duty Act of 1899, the stamp duty charges were levied by the government on all your transactions. Earlier these charges were dependent on the states and varied according to that.
But from July 1, 2020, the government has decided to keep the stamp duty charges uniform across the nation irrespective of the state or residential address.
These are the major charges that are levied on your demat account and the services that it provides you.
A demat account is an absolute necessity when starting your investment journey in the share market.
There are various charges for demat accounts, like demat account opening charges, AMC charges, stamp duty charges, etc, that are levied when you start using the demat account of any stockbroker.
The competition has definitely reduced a lot of charges but they are not completely waived off till date.
Avail the benefit of investment by opening a demat account with the renowned stockbroker. Get in touch with us and we will assist you in opening a demat account online for FREE!