Overview of Various Types of Demat Accounts

Stock market investments present a wide range of opportunities to secure better financial growth. Short for dematerialised, a Demat account stores shares and securities electronically. 

With it, you can trade in the capital market and eliminate the risk associated with storing certificates physically. Such accounts come with certain fees and charges, which depend on the Depository Participant (DP) and the type of account you hold.

As per the Securities and Exchange Board of India (SEBI), a Demat account is mandatory for investing  in shares and securities. This account is managed by a DP, who is associated with one of two major depositories in India. These are the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). 

 

Here are the three types of demat accounts:

1. Regular Demat Account

This account is meant for residents living in the country. It stores your investments in a digital format and operates just like a bank account. Your Demat account is credited when you buy shares and debited when you sell the stocks. 

 

There is another account for stock market investments under this category called the Basic Services Demat Account (BSDA). SEBI introduced BSDA to encourage financial inclusion in the country.

 

A BSDA comes with no maintenance charges if the total value of your holdings is below ₹50,000. If the holdings range between ₹50,000 and ₹2 Lakhs, an annual charge of ₹100 applies.

 

Remember, you do not need a Demat account for investments in futures and options. These have expiry dates and do not need to be stored like equity shares.

2. Non-repatriable Demat Account

This type of Demat account is designed for citizens residing outside the country. Apart from Non-resident Indians (NRIs), it is available to People of Indian origin (PIO) living in countries with foreign exchange regulations.

 

A non-repatriable Demat account does not allow you to transfer the sale of your proceeds to foreign countries. It is also known as a Non-Resident Ordinary (NRO) Demat account, and you need to link it to an NRO savings bank account.

3. Repatriable Demat Account

A repatriable Demat account allows you to transfer funds outside the country once you link the account with your Non-residential External (NRE) bank account. The ability to transfer funds abroad depends on the laws and regulations of both your citizen country and the residing country.

Since so many DPs offer demat accounts, choosing a suitable one can be a challenge. Here are some parameters that could help you select the right one:

• Convenient account opening process

• Low account opening charges

• Easy-to-navigate user interface

• Lower brokerage charges

• Responsive and quick customer service

• Trustworthiness of the DP

• Adequate security features 

• Choice of investment options and trading platform

• Costs associated with the MTF 

• Availability of information and insights 

On Bajaj Markets, you can open a Demat account at zero charges and pay no annual maintenance charges. You could also benefit from affordable Margin Trading Facility (MTF) interest rates, starting at 10.75%.