Know Everything About Demat Account Opening Charges
If you are planning to invest in the stock markets, you will first need to open a demat account. The term demat account is the shortened form of ‘dematerialised account’. Here, all your transactions get stored in a paperless or digital format. The demat account allows you to buy and sell shares in the electronic form. There are none of the hassles of using the physical format. Apart from shares, you can also buy and sell bonds, government securities, mutual funds, and exchange-traded funds (ETFs).
Points To Consider Before Opening Demat Account
While choosing your brokerage, remember to compare the demat account opening charges based on the following parameters.
1. Brokerage Charges:
Whenever you buy or sell stocks, you have to pay a fee. The charge can be a fixed amount or a percentage.
2. Annual Fee:
This is charged once a year and typically varies from Rs 500 to Rs 2,000.
3. Demat Charges:
In case you hold shares in the physical format, the brokerage charges a fee to convert them into the electronic form.
4. Technology Platform:
The platform is extremely important for trading. It should be robust and should never let you down.
Benefits Of Opening A Demat Account
Physical certificates can be easily forged. They can also get lost or damaged. However, with a demat account, you will eliminate such risks as the entire operation is paperless. You can save a lot of time and energy when you opt for a demat account. All the transactions are done in the electronic mode. So, there is no need to hand over the physical documents to the buyer or seller directly. You can do this from the comfort of your home without any paperwork, which saves time. Moreover, you get a fair idea beforehand about the costs involved in the transactions as these are disclosed by the brokerage.
Before choosing a brokerage to open your demat account, compare the fees levied by them for the following:
-
Demat Account Opening Charges:
Usually this is a free service. Brokerages with such charges may offer other benefits.
-
Demat Account Annual Maintenance Charges:
This fee is usually below Rs 500 annually. Many brokerages do not charge this fee.
-
Equity Intraday Trading/Brokerage Charges:
The intra-day trading charges range from 0.03–0.015%. For equity delivery trading, the brokerage charges may range from zero to 0.25%.
-
Trading Account Annual Maintenance Charges:
This usually is limited to below Rs 1,000.
Read more: Types of demat account
Why Kotak Securities Should Be Your Choice
Once you choose Kotak Securities after running a comparison with other brokerages, you are entitled to several benefits.
1. 3 Accounts In 1:
A demat account with Kotak Securities offers you a complementary trading account and a bank account with Kotak Mahindra Bank. Therefore, you get three accounts at the cost of one. You can opt for this by filling up one application form. But you might feel more comfortable doing the transactions from your existing bank account. In that case, you can choose to open only the demat and trading account.
2. Intra-day Trade:
The demat account gives you access to intra-day trading where you can buy and sell shares during the day. The charges are negligible at ₹10 per trade.
3. Margin Trading:
It often happens that stocks appear lucrative but there isn’t enough money to grab them before they are gone. This will not be the case if you have a demat account with Kotak Securities. You can make use of the margin facility where you can borrow money from the brokerage to buy the shares of your choice.
4. Easy-To-Use App:
These days, there is a mobile application for almost everything. Kotak Securities offers you an app that is extremely convenient and helps you remain in the thick of things on the go. With the app, you can remain updated with the latest stock market news, check your portfolio, and see the movement of the stock prices besides doing fund transfers.
5. Expert Analysis And Tips:
Kotak Securities offers you a comprehensive analysis of the stock markets on a daily basis with insightful research reports compiled by a team of experts. You also get recommendations of stock picks that are trustworthy.
Read more: Uses of a demat account
Conclusion
Opening a demat account is mandatory to carry out trading on the stock exchanges. It is a convenient way of holding the shares in an electronic format. Several brokerages offer demat account services to clients. There are a few charges involved with such an account. One should carefully choose the brokerage by running a comparison of the charges.
Click here to open a demat account.
Read More:
FAQs on Demat Account Opening Charges
Are there any hidden charges in a Demat account?
There may be some hidden charges on a Demat account. However, it usually depends on the broker. Some brokers also inform their customers of all the applicable charges. Thus, it is advisable to go with brokers that have a transparent pricing structure.
What is the minimum balance for a Demat account?
There is no fixed or standard minimum balance for a Demat account. It usually varies from one broker to the other.
What happens if I don't pay AMC for a Demat account?
If you don’t pay the annual maintenance charges (AMC) you will receive repeated reminders from your stockbroker. Still, if you don’t make the payment the broker can terminate the Demat services. Your Demat account will become inactive or dormant. The AMC is an essential part of a broker’s revenue. So, it is generally mandatory to pay AMC.
How much does it cost to open a Demat account?
Opening a Demat online account requires nominal opening charges to be charged by the Depository Participant. Some depositary participants offer you the possibility to open a Demat account free for one year and then be charged again in subsequent years.
What is brokerage on demat accounts?
A financial account that enables an investor to make investments and purchases of financial products such as stock, mutual funds, bonds, exchange-traded funds, or any other securities is a brokerage account or Demat account. This account will operate as a bank account, where you can deposit and invest in any financial asset.
What are minimum brokerage charges for demat accounts?
The brokerage fee is typically 0,1% to 0.5% of the total value of transactions in India. For instance, if a share is valued at Rs. 10,000 and the brokerage fee is 0.1% of that amount, the total sum due would be Rs. 10.
Is there any zero brokerage?
While discount brokerage charges a set price (often Rs. 20 per trade), zero brokerage charges no brokerage for all items. Zero brokerage is a component of the discount brokerage trading strategy.
