As a trader or investor or simply a stock market enthusiast, you must be aware of the importance of the Demat Account, right? However, whether does demat account has charges or not is a question that confuses a lot of people.
It is obvious that stockbroker charges brokerage fees for trading in different segments, but when it comes to specific fees for demat account, is there any fees for demat account as well. If yes, then what are the types of these charges, and why it is charged?
We will cover all these questions and queries in this article in detail. So, let’s get started.
As the name says, this charge is levied by the stockbroker on you for opening a demat account with them. These charges are a kind of incentive imposed by a broker. Now there are different types of stockbrokers and hence each of these come up with a different range of charges for account opening.
For example, considering account opening with Zerodha, the broker imposes ₹200 account opening fees on the other hand there are full-service stockbroker like Motilal Oswal that gives the benefit of free account opening.
Now when you open a demat account, you keep your stocks and securities in it securely. Now, to keep it operative and to maintain the security of holdings, one has to pay the Account maintenance charges.
Now, these charges are charged on a monthly, quarterly, or yearly basis and the stockbrokers charge this fee for maintaining your demat account smoothly with them.
Again, most stockbrokers don’t charge any AMC for the first year of account opening practically making the demat account opening process free and again, Zerodha is an exception to this. This stockbroker charges ₹ 75 every quarter and ₹ 300 every year right from the first year of the demat account opening as AMC.
Most other stockbrokers charge the AMC from the second year onwards.
Now let’s take a look at what are the charges of demat account with some of the most prominent stockbrokers in India. The table below provides the complete information.
Even though you don’t have to pay any account opening charge or AMC to these stockbrokers for opening and having demat accounts with them, a free demat account doesn’t mean you will be exempted of the brokerage and other charges too.
When you trade using your demat cum trading accounts, you still have to pay certain brokerage charges along with other hidden charges.
So basically, a demat account does have charges associated with it when it comes to most stockbrokers. There are two types of demat account charges and we have already discussed them.
Most stockbrokers charge you either for the first or second or both. However, there are some brokers who don’t charge you food any and with them, the demat account basically becomes free of charge with them.
But at the same time, you have to make sure the broker you choose suits your expectations and provides you with all the services you need. Without saying that free-of-cost things are bad, a person should evaluate their stockbroker on every parameter.
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