Investors to Get No-Frills Demat Accounts From Oct 1

Come October 1, investors will be able to open no-frills demat accounts for trading in stocks, mutual funds and other securities without any annual maintenance charges for holdings up to Rs 50,000.

Further, if the value of their portfolio exceeds 2 lakh, the charges would be capped at a maximum of Rs 100 a year. Thus, the investors have the option to convert their normal accounts to no-frills account if the value of their holdings goes below this threshold limit.

Market regulator SEBI has taken effort to encourage an investment culture in the country and reach out to a wide range of small investors. The depository participants who manage the investor’s demat accounts have been asked to provide “Basic Service Demat Account (BSDA)” with limited services and nil charges to all small individual investors.

Demat accounts are necessary for individuals to trade in the market, where securities or shares are stored in dematerialized or electronic form. The value of holding will be determined on the basis of NAV or daily closing price.

According to SEBI, investors can get electronic statements of their accounts at no cost and at least two physical statements would be provided during the billing cycle at free of cost and would able to get any additional physical statement with a fee not more than Rs 25 per statement. Also, investors would get SMS alert facility on their mobile phones for debit transactions on their demat accounts.

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