demat-account-charges

DEMAT ACCOUNT CHARGES

A Demat account or a dematerialised account is used to hold and trade in shares and stocks. According to SEBI regulations, you can’t possibly trade in stocks and equity shares without opening a Demat account first.

A Demat account can be opened like a normal bank account, except for the assets that you can hold in this account vary from exchanges, securities, ETFs, to shares and equities.

Holding a Demat account helps you sell and buy stocks seamlessly and ensures a smooth transaction experience every time you trade. But having a Demat also incurs a certain amount of annual maintenance charges.

What are the Demat Account Charges?

The charges on a Demat account vary from one bank or brokerage firm to another. Some banks charge a certain amount of annual maintenance fees apart from their commission on transactions done by you. Some banks, on the other hand, do not even charge a maintenance fee on your Demat account if you are an existing customer. However, every time you perform a purchase or sell, you may have to pay a small share of the transaction to your brokerage firm or the bank. This charge differs according to the amount of transaction that you indulge in.

How much do different firms charge?

ICICI is the cheapest option in terms of maintaining and opening a Demat account. The bank charges zero account opening fee and no annual maintenance charges if you are already a member of the bank, that is if you already have an account. The bank charges 0.55% of brokerage charges on every transaction going above Rs 2 Lakhs. HDFC Securities, on the other hand, charges a sum of Rs. 999 as the account opening fees and thereafter, 0.50% brokerage charges on all transactions.

Talking about big brokerage firms like Kotak Securities, they charge an amount of Rs. 750 for account opening and a brokerage share of 0.49% on transactions afterwards.

IDBI Capitals charge a mere Rs. 500 for opening an account. They also charge a transaction fee of 0.50% of the amount of each transaction. Yes Securities charge Rs. 999 as the account opening fees. But their brokerage charges are comparatively lower at 0.45% of the transaction amount.

SBI Securities charge you an amount of Rs. 850 for opening a Demat account and a 0.50% on each transaction after that.

The brokerage charges for most of the banks are almost the same at 0.50% of the transaction amount. Axis bank also offers good Demat account subscriptions at an account opening fee of Rs. 900 and 0.50% brokerage charges on stock transactions as a part of its AxisDirect scheme.

Some of these firms also charge a nominal annual maintenance fee. This amount may vary from Rs. 30 to Rs. 200 depending on the number of transactions that you have performed using your Demat account.

Although the brokerage charges vary across firms, the cheapest may not be the best always and the firms charging more may be providing quality brokerage services. So compare the charges well, understand the terms and conditions and choose judiciously.

Gill Broking makes your Share Investment & Trading Experience simple with major exchanges like NSE & BSE.

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

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