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What are the Charges Payable for Opening and Maintaining a Demat Account?
If you are looking to buy and sell shares you cannot do so through the stock exchanges, unless you maintain a demat account with one of the depository participants in India.
The correct term used is a beneficiary account or BO with a Depository Participant (DPs). DPs act like banks and facilitate the opening and closing of demat accounts.
Costs for opening a demat account
There are various costs that are levied on opening and maintaining demat accounts. However, SEBI has tried to intervene and ensure that the costs are reasonable and also rationalised.
The Securities and Exchange Board of India has ensured that:
There are no account opening charges, transaction charges (for credit or buy transactions of securities), custody charges and account closing charges. Custody charges are now paid by the issuer companies.
The following charges are applicable though:
1) Demat and Remat of shares
When you convert physically held shares to electronic form, it is called dematerialization or demat and when you do vice versa it is called rematerialization. There are charges levied when you undertake both the above mentioned.
2) There is also an annual account maintenance charges that are levied by the Depository Participants. The Depository Participants are allowed to revise the charges subject to a notice period of 30 days.
According to The Securities and Exchange Board of India it has advised DPs to submit to their Depository their tariff/charge structure every year latest by 30th April and changes made therein, along with the date of effect to enable the investors to have a comparative analysis of the tariff/charge structure of various DP's.
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