Does Demat Account Have Charges?
Check All Frequently Asked Questions
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.
List of Charges for Demat Account
There are different types of charges imposed on the demat account, depending upon the services you take. Listing those charges, these are:
- Demat account opening charges
- AMC charges
- Pledge charges
- Dematerialization charges
- Rematerialization charges
Among these charges, it is important to check the demat account opening and AMC charges at the time of choosing a stockbroker.
Focusing on these two charges, let’s have a quick look at why these charges are imposed and what different stockbrokers have to offer to their clients.
Demat Account Opening Charges
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.
AMC for Demat Account
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.
Demat Account for Free
Above are the major charges imposed by the stockbroker on a demat account. Now apart from this, there are some brokers offering the services for FREE!.
This free services includes zero account opening fess and zero AMC charges. Thus, a trader and investor can reap the benefit of a free demat account with no annual charges.
Here is the list of stockbroker offering the demat account for free.
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.
Want to begin your investment journey. Get in touch with us now and our team will assist you in choosing the right stockbroker and in opening a demat account online for Free!