The Securities and Exchange Board of India (SEBI) has announced an increase in the threshold for Basic Services Demat Accounts (BSDA) from Rs 2 lakh to Rs 10 lakh. Effective from September 1, 2024, investors can hold securities worth up to Rs 10 lakh in their BSDA. Introduced by SEBI in 2012, BSDA is designed to reduce the cost of holding securities for small investors by offering lower charges compared to regular Demat accounts.
Eligibility: To be eligible for a BSDA, you must be the sole owner of the account and should not have any other Demat account. Joint accounts are not eligible for BSDA if you are the first holder.
Value of securities: Post-September 1, 2024, the value of securities in a BSDA should not exceed Rs 10 lakh. If it does, regular brokerage charges will apply, and the account will no longer qualify as a BSDA.
Demat Account charges
Regular Demat accounts come with annual maintenance fees ranging from Rs 300 to Rs 800, depending on the Depository Participant (DP). Under SEBI's new guidelines:
- Portfolio value up to Rs 4 lakh: No annual maintenance charge.
- Portfolio value above Rs 4 lakh and up to Rs 10 lakh: Rs 100 annual maintenance charge.
- Portfolio value above Rs 10 lakh: The account will convert to a regular Demat account, with standard charges applied.
Electronic and physical statements
BSDA holders will receive electronic statements free of charge. However, physical statements will incur a charge of Rs. 25 per statement.
Implementation and conversion
SEBI has directed Depository Participants (DPs) to review and convert eligible existing Demat accounts to BSDA within two months of the effective date, unless the account holder opts to retain their regular Demat account via email.
Choosing the right Demat Account
Investors considering which type of Demat account suits their needs may explore options such as those offered by Sharekhan, which provides competitive rates and various account options tailored to individual requirements.
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