The limit of Rs.2 lakh value is the key criterion. These values will be assessed on a daily basis on all trading days based on the closing stock price or the closing NAV of the mutual fund as the case may be. If the market value exceeds Rs.2 lakhs then the DP is entitled to bill you the charges at the normal rate applicable to other demat account holders.
An important point to remember here is that a BSDA demat account can only be held in the name of an individual in his / her individual name. Joint holdings is not permitted in case of BSDA accounts nor is holding demat accounts in the name of Hindu Undivided Family (HUF) permitted in case of a BSDA account.
The AMC charges in case of BSDA are substantially lower. For example, in case of custody value less than Rs.50,000/- the BSDA will not charge any AMC. If the custody value is between Rs.50,000/- and Rs.2,00,000/- then the DP can charge you Rs.100 as AMC for the demat account.
A BSDA account is like a normal DP account for all other purposes. The value is the cut off limit. In case you are holding a normal demat account and your find your portfolio is within the overall limit then you can opt to convert this into a BSDA account and save your annual costs.