Best Demat Account in India

Published on Thursday, April 18, 2019 by Chittorgarh.com Team | Modified on Tuesday, November 16, 2021

Best Demat Account in India

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Demat account charges form a significant part of your trading costs. So, if you want to cut down on your trading costs and improve profitability, then you need to find low brokerage demat accounts in India. This article discusses demat account meaning, how to open demat account online and provides you with an unbiased list of best demat accounts in India.

To trade in stock exchanges and buy/sell stocks, derivatives, currency, and commodity, etc., in India, you compulsorily need 3 types of accounts:

  • Trading account

    A trading account gives you access to different stock exchanges in India like NSE, BSE, and MCX, etc., to trade in various financial instruments like equity, commodity, and currency, etc.

  • Demat Account

    A demat account is needed to hold the financial securities in the electronic form.

  • Bank Account

    A bank account is linked with the trading and demat account for transferring funds to the trading account. It is also used to pay benefits like dividends, bonuses, etc. Any benefits earned from mutual funds and stocks etc. are transferred to the bank account linked with the demat account.

Demat Account Introduction (Demat Account Meaning)

A demat account works like a bank account. It is an online place where financial instruments like stocks, mutual funds, IPO shares, and bonds are kept in the electronic form. Just like a bank account, the securities are credited and debited from the bank account as you buy and sell them in stock exchanges.

The demat accounts are managed by National Securities Depository Ltd (NSDL) and the Central Depository Services India Ltd (CDSL) in India. Brokers offering demat account opening services need to be a member with either of the depositories.

Online Demat Account Types

There are 2 types of demat accounts available with the brokers:

  • BSDA Demat Accounts

    BSDA or Basic Services Demat Accounts are meant for small investors. SEBI has mandated every broker to offer BSDA accounts to the investors. These accounts offer limited features and have No AMC for holding securities value up to Rs 50,000. For securities valuing between Rs 50,000 to Rs 2,00,000, an AMC of Rs 100 is charged. Normal Demat Account Charges are applicable once the value of securities held in the account crosses over Rs 2 lakhs in a year.

  • Regular Demat Accounts

    These are normal demat accounts where there's no limitation on features. Brokers charge AMC as per their usual rates. Traders can hold securities of any value in these demat accounts.

Finding Best Demat Accounts in India (Low Brokerage Demat Accounts)

With demat accounts being such an important part of your stock trading, it is important to find the best demat account in India. By best demat account, we mean a demat account with low charges and No AMC. The broking industry offers many choices in Demat accounts with most of the brokers, both full-service and online discount brokers, offering demat account opening services. Please note that you cannot directly open a demat account with a central depository - NSDL or CDSL. You have to approach a licensed stock broker to open a demat account in India.

4 Tips to find the best demat accounts in India

  • Decide on the type of demat account you need

    This will depend on your trading turnover per year. How much you are going to invest in the financial markets? How much value of securities you will buy in a year? If you plan to invest in stocks and mutual funds etc., for up to Rs 2 lakhs then a BSDA account will be suitable for you as it has low demat account charges. For those planning to invest more than Rs 2 lakhs per year would need a regular demat account.

  • Create a list of brokers matching your trading needs

    Please note that you cannot open only a demat account. Stockbrokers either offer a 3-in-1 account (trading, demat and bank account) or 2-in-1 account (demat and trading account). So you have to open a trading account along with the demat account. So, create a list of brokers who offer good trading services.

  • Compare and Select

    Compare brokers from your list on various parameters like demat account features, charges, service quality, etc. Select the best demat account from the comparison.

  • Don't forget to check out discount offers

    Most brokers these days offer discounts in the form of No Account Opening Fee, Cashback, No AMC and Lifetime AMC, etc., to attract customers. See if the broker you are opening an account with is offering any such discount and how you can avail it.

To save you time on research, we have created a list of top 20 best demat accounts in India.

How to open demat account online in India?

These days you can open demat account online in a few minutes. Brokers provide 2 ways of opening demat account online:

  • Instant, paperless account opening

    The fastest way to open a demat account. Brokers like Zerodha, Upstox, etc., offer this facility wherein you can open a demat account online in a few minutes. To open instant demat account online, you need PAN card, AAdhar with your current mobile number linked with it and scanned copies of a cheque and bank statement. Online in-person verification is done to verify your documents and on successful application, the account gets active the same or next day.

  • Fill a Form

    The other way of opening an online demat account is to visit the broker's website and fill an online form giving your name, mobile number, and city, etc. A company representative will get in touch with you to take the process forward.

Most of the time, we don't keep a track on demat account charges. It has a long bearing on the trading costs and ultimately the profits you make from trading. So find the demat account in India with low charges and make most from your stock trading.

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