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.
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