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Demat Account Opening Charges

Demat Account Charges

A Demat account is a virtual account where assets such as shares, mutual funds, bonds, ULIPs, digital gold etc. can be held in dematerialised or electronic form. Akin to a bank account being legally mandatory to carry out online transactions, a Demat account is also compulsory for buying and selling i.e., online share trading in India.

In fact, the meteoric rise of online share trading in India can be credited to the ease, safety, and convenience provided by Demat accounts. But there are no free lunches in this world. Similarly, contrary to popular assumption, a Demat account is never really free. Yes, a Demat account has various charges that add to the overall cost of your trade. So, while most brokers provide free Demat account opening, they do charge hefty brokerage and other Demat account charges like account maintenance charges, dematerialisation charges, pledge charges etc. Majority of the time, investors end up paying a big chunk of their profits in brokerages. This is why understanding Demat account charges is a must to ensure your profits aren’t washed away by a wave of Demat account charges. But before we understand the nitty-gritties of Demat account charges, it is important to understand how a Demat account works.

How do Demat accounts work?

A Demat account works in tandem with a trading account. A Demat account only stores your assets. It does not function on its own. You can open a Demat account online in a hassle-free manner. At m.Stock, we offer a free Demat account that can be opened online within five minute. By opening an online Demat account, you can enter the world of seamless trading.

In addition to a Demat account, there is another account required for trading in the stock market. This account, known as a trading account, is the conduit through which you can place buy and sell orders in the market.

An online Demat account is akin to a bank locker where the securities purchased by you are stored in an electronic form. You can place an order to buy or sell securities through your trading account. Once you place a buy order through your trading account, the order is submitted to the relevant stock exchange by your stock broker and the order gets processed.

The purchased securities, for instance shares and mutual fund units, are then dematerialised or converted into an electronic form. Following this step, the digital certificates of securities get stored in your Demat account.

Conversely, when you place a sell order, the relevant number of securities get debited from your Demat account. Buying and selling securities through an online Demat and trading account is, thus, quite similar to depositing and withdrawing money to and from your bank account.

What are Demat account opening charges?

Demat account opening charges are the charges that are levied when you apply for a Demat account. These charges are considered to be part of the standard procedure of opening a Demat account. It is important to note here that all the Demat accounts opened in India are held at one of the national depositories, namely the Central Depository Services Limited (CDSL) and the National Securities Depository Limited (NSDL).

The brokerage firm you choose to open your Demat account serves as the intermediary between you and one of the depositories mentioned above. The Demat account charges comprise of the following major elements.

  • Demat Account Opening Fee:

    The Demat account opening fee is a one-time charge that is levied whilst opening a Demat account. This charge is usually in the form of a flat fee.
  • Demat AMC:

    Another important element of the Demat account opening charges is the Demat AMC or Annual Maintenance Charges. Your stock broker charges a Demat AMC on an annual basis for the maintenance of the account. Even if you do not carry out any trades in your Demat account throughout the year, you are liable to pay the applicable Demat AMC.
  • Dematerialisation of share certificates:

    Dematerialisation is the process of converting physical share certificates into an electronic form so that they can be saved in your Demat account. Your Demat opening charges contain a fee for the dematerialisation of share certificates.
  • Conversion of mutual fund units:

    There is a flat fee levied for the conversion of the physical units of mutual funds into an electronic form.
  • Rematerialisation of share certificates:

    Rematerialisation or the conversion of digital share certificates into physical share certificates, is also charged in your Demat opening charges.

What is The Cost of Opening a Demat Account?

We have discussed what Demat account charges are along with their respective frequencies. The actual Demat account opening charges vary from one depository participant to another. Should You choose to open a Demat account at m.Stock, you will be required to pay zero Demat account opening charges.

With over 25 years of expertise providing excellent services to our customers, we offer a Demat account opening experience that is swift, seamless, and cost-effective. In addition to zero Demat account charges, we also offer the following excellent benefits.

  • Zero brokerage on equity delivery transactions
  • Zero brokerage on Intraday Transactions
  • Free Futures and Options Trades
  • Free trades for mutual funds
  • No annual charges
  • No subscription fee

You can visit our official website and open a free Demat account now.

What Are The Different Modes of Opening a Demat Account in India?

You can open a Demat account through two modes, namely, online mode and offline mode. Here are the steps you must follow to open an online Demat account at m.Stock:

  • Download our official mobile application - m.Stock.
  • Sign up using your mobile number.
  • Enter the necessary Know Your Customer details.
  • Verify your Proof of Identification and Proof of Address.
  • Verify your PAN details.
  • Verify your date of birth.
  • Select a payment method that is feasible to you.
  • Complete the payment process and pay the Demat account opening charges.
  • Complete your profile on m.Stock, including the submission of your bank account details.
  • Once your Demat account has been opened, your login credentials shall be shared with you and you can start trading.

Alternatively, you can opt for the offline mode of opening a Demat account. This process is more cumbersome than its online counterpart.

Some of the major benefits of opening an online Demat account with m.Stock are as follows:

  • Zero account opening charges
  • Five minutes for the onboarding process
  • e-sign and Digi locker benefits
  • Paperless process
  • Instant activation of your Demat account

To Sum It Up

Head over to the m.Stock mobile trading application now and open an online Demat account without paying any account opening charges. Enjoy Zero Brokerage on equity delivery transactions, intraday transactions, and Futures and Options trades.

Frequently Asked Questions

Yes, a Demat account is a necessity for trading. You can open a Demat account with a registered depository participant, for instance, Mirae Assets.

Yes, it is mandatory to dematerialise your physical share certificates. Depository Participants usually charge a fee for this service.

You can open a Demat and trading account with a depository participant and start trading in the securities market. Your buy and sell orders are placed through your DP and submitted to the stock exchange for execution and, in turn, delivery.

Demat AMC is the annual maintenance charge for your Demat account. This charge is levied by stock brokers for the maintenance of the account.

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