To begin with it is important to point out that SBI Cap Securities, a subsidiary of State Bank Of India (SBI) opens demat accounts, which are generally 3-1 account with your savings bank account being maintained by the State Bank of India.'
Demat acccounts are needed, if you want to buy and sell shares through the recognized staock exchanges in the country. You can still hold shares in the physical form, but, you cannot use such shares to be sold through the stock exchanges, that is the BSE and the NSE.
Take a look at the charges on maintaining demat account at SBI
|Demat account opening charges||Rs 100|
|Trading account opening charges||Rs 400|
|Maintenance charges for demat account||Rs 400|
|Failed delivery instruction||Rs 35|
|Delivery instruction||Rs 10|
Linking SBI Savings Account to demat account
You can link your demat account to SBI Savings Accounts and trading account. This means that you would have a 3-1 account, which is very beneficial for trading and investing purposes.
For example, when you want to sell shares your demat account and to receive the funds, you can get them in your savings acccount automatically credited. You do not have to wait and the process is also very simple.
You can also pledge your shares with State Bank of India, which can offer you loan against shares. Their trading platform is known to be friendly through one cannot say much of the service.
As regards comparison of SBI demat charges with other banks and companies providing the same service, we think it would be worth opening in some private brokerages.
For example, many are opening free demat accounts. We like the Sharekhan account, because the charges for trading and delivery based transactions, is much lower than the charges levied by SBI.
We also believe that when it comes to service, some of these can offer much better service than SBI.
However, most of the time investors are compelled to open an account where they have a savings bank account.
Most of the private sector brokerages, provide you all the services that SBI provides and we do not see any particular advantage.
Also, if you are trading regularly, it would be worth considering, low cost brokerages that offer flat transaction fee that enables you save money.
For example, Zerodha charges a brokerage of Rs 20 per transaction. Similarly, other broking firms like RSKV, Tradejini etc. You can see the complete list here.
It is important to remember before opening a trading and demat account, you should compare all these things. Once you have opened an acccount and realize that the fees are not competitive, you would end-up losing money.
A demat, trading and savings account is good, as they help to seamlessly trade and invest in shares. All these are beneficial, however you must look for the costs involved.
We recommend you do a comparison before opening an account.