Demat Account: Everything You Need To Know About It’s Charges
A demat account allows you to trade freely in various securities. The processes like selling, buying, and holding shares alongside monitoring stock prices have been made simple by a demat account. However, as you get nothing for free, there are some demat account charges that you need to bear for these facilities. Here are the list of services and charges associated with a demat account:
Account opening fees
Most stockbrokers waive off the account opening charges as they want more and more individuals to use their trading platform. Also, some brokers offer a 3-in-1 account these days that allow you to open a bank account, trading account, and demat account simultaneously.
Custodian or safety charges
Previously, traders had to worry about the safety of their stocks as they share certificates were provided only in physical form. However, as you can now hold shares in digital format in your demat account, there is no need to worry about the share certificates. However, banks and depository participants usually charge a fee called custodian or safety charge for holding the securities. Also, the custodian fee is usually charged on a yearly basis.
AMC
AMC i.e. Annual Maintenance Charges is a yearly fee that you need to pay to the DP for maintaining your demat account. Some DPs waive off the AMC for the first year of trading whereas some DPs decide the AMC according to the number of transactions you carry out in a year. You might also have to pay quarterly maintenance fees with some stockbrokers.
fees
Different stockbrokers employ different broking models when it comes to levying transaction fees. The transaction fee is nothing but the brokerage you pay for every transaction. While some brokers charge a flat fee for every trade, others charge as per the volume of the trade you carry in a particular month.
It is necessary to compare the brokerage, AMC, custodian fees, and other charges that might be associated with different demat account providers. The lower fees and charges will enable you to earn a higher profit from trading. Apart from the demat account charges, you should also compare these things before opening a demat account:
Online trading platform
The stockbroker with whom you have opened a demat account should also provide you with a seamless online trading account. With this 2-in-1 account, you should be able to trade in multiple securities like F&O, commodities, currencies, equities, mutual funds, etc. Also, the online trading platform must be user-friendly and must load quickly even when the internet connectivity is weak.
Seamless buying and selling
With a demat account, you should be able to buy and sell securities in real-time. These days, most stockbrokers provide a live chat where you can compare prices of different stocks, IPOs, and other securities and buy them in real-time. Multiple analytical tools like candlestick charts, line charts, moving average detectors, etc. are offered to empower you to make smart decisions.
Portfolio management services
Many stockbrokers offer portfolio management services that include consultation and tips required to earn profits in trading. You can consult with a portfolio manager who will give advice to you as per your investment goals.
Read also:- Pros And Cons Of Long-Term Trading
