Today most of the banks and many of the brokers have started offering zero account opening charges. Remember, this zero charge only applies to the opening of the demat account. For most banks, the free demat account opening is feasible because the person who opens the demat account with banks is normally also having savings account with the same bank. Therefore, the bank is anyways benefiting from the balance float of the individual. So, when the bank is making money on one side, they can always give you some discount on the other side. While some banks offer free demats accounts if your bank account is with the same bank, other banks charge you a steep charge if your bank account is elsewhere.
While most of the full-service brokers are either offering demat account opening free or at a very low cost, the discount brokers do charge you a fixed fee for opening a demat account. Normally, DPs will also charge you separately for the legal stamp paper charges in case of Power of Attorney execution. This is normally charged on actuals. Even though the demat account opening charges are waived off, the DP will still charge you an annual maintenance charge (AMC). These charges typically vary from Rs.300 per annum to Rs.800 per annum. Many brokers, as part of their special offering to customers, absorb the AMC charges for the first year and only bill you from the second year onwards. Mark out here, the waiver is only for the first year and that is also subject to conditions and catches. Banks typically have differential rates of AMC. Banks tend to charge you lower AMC if the trading account is mapped to the same bank but charge higher if the trading account is not mapped to the same bank. Is there a way to get AMC charges waived?