InvestorQ : How do I convert my demat account into a BSDA Account?
diksha shah made post

How do I convert my demat account into a BSDA Account?

Jignesh Gupta answered.
3 years ago
The process of converting your demat account is quite simple. If you custody value is likely to be consistently lower than the threshold of Rs.2 lakhs, you can write to the DP to shift your account into a BSDA account. Remember, the word consistently is important. For every month the DP account has a cut-off date. If the balance has been consistently more than Rs.2 lakh then you may be asked to convert back into a normal demat account or it may just happen by default. Remember, if your portfolio is worth Rs.1.50 lakhs today and over 2 years it appreciates to Rs.3 lakhs, then you are liable to hold the shares in a normal demat account and not in a BSDA demat account. From the next billing cycle, the change will be implemented.
The advantage of BSDA is that it enables you to participate in the equity markets without worrying about the prohibitive demat cost. For small investors the demat cost is a fairly steep cost and the BSDA account is a step forward!