Frequently Asked Points
Other securities that can be held in a single demat account
An investor can also hold the certificates of his financial instruments such as shares, bonds, government securities, mutual funds and exchange-traded funds (ETFs such as gold) in a single demat account.
Insurance demat account
As of now, e-insurance products need a separate insurance demat account. The Insurance Regulatory and Development Authority of India (IRDA) is yet to make holding of insurance demat accounts compulsory.
Operating a joint account
An investor cannot operate a joint account on ‘either or survivor’ basis like a normal bank account. Any instruction in a demat account needs to be executed ‘jointly’. However, if the beneficial owner authorises any person to operate his account by executing a power of attorney and submits the same to the DP, that person can operate the account on behalf of the beneficial owner.
Minimum balance of securities in demat account
There is no rule to keep any minimum balance in demat account.
Charges levied on demat account
According to SEBI guidelines, there is no charge for opening of demat account. However, banks and DPs could charge a nominal amount towards know-your-account registering charges (KRA) for meeting out-of-pocket expenses like scanning the KYC documents. Other types of fees charged are annual maintenance fee, custodian fee and transaction fee. Fees towards dematerialization and rematerialisation (converting electronic form back to physical form) of securities range between Rs 10 and Rs 40 per request form. Annual maintenance fee is charged by the DP to maintain your demat account and can range between Rs 300 and Rs 500 annually.
Opening a beneficial owner (BO) account to trade in the capital market
As per the available statistics at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), 99.9 per cent transactions take place in dematerialized mode only. Therefore, in view of the convenience of trading in dematerialized mode, it is advisable to have a beneficial owner (BO) account for trading at the stock exchanges. However, to facilitate trading by small investors (maximum 500 shares, irrespective of their value) in physical mode, the stock exchanges provide an additional trading window to extend one-time facility to small investors to sell physical shares that are in the compulsory demat list. The buyer of these shares has to demat such shares before further selling.