Most of us who don’t invest regularly in stocks, bonds, gold ETFs, IPO, etc may find maintaining our demat accounts a pain because of the charges. The costs, such as annual maintenance and statement charges, make these accounts relatively expensive. That is where basic service demat account (BSDA) is a useful add-on. The basic services demat account promises to provide limited services at reduced costs to retail investors. These accounts are also called no-frills or basic trading accounts. An individual—who currently has a demat account or plans to open a demat account where he is the only first holder—will be allowed to open the BSDA. The individual needs to ensure that the value of securities held in his basic trading account will not be more than Rs. 2 lakh at any given point of time. According to SEBI circular, all depository participants (DPs) will make basic trading accounts available with limited services and reduced costs. DPs’ will offer BSDA from 1 October 2012. Remember that you are allowed to open only one BSDA across all DPs.
The annual maintenance charges structure will be on a slab basis. If you hold investments worth up to Rs. 50,000, there is no annual maintenance charge. However, if you hold investments above Rs. 50,000 up to Rs. 2 lakh, you will be charged an annual maintenance fee of Rs. 100. This BSDA will also offer SMS alert facility for debit transactions. Usually, a demat account is opened free of cost. However, DPs—such as banks and brokerages—may collect annual charges upfront at the time of opening a free demat account? At present, many DPs charge between Rs. 300 and Rs. 500 as annual maintenance charge regardless of the amount in the account. Transaction statements shall be sent to the account holder at the end of each quarter. If there are no transactions in any quarter, no transaction statement may be sent for that quarter. If there are no transactions and no security balance in an account, then no further transaction statement needs to be provided. Transaction statement shall be required to be provided for the quarter in which the account became a zero balance account.