Basic Services Demat Account (BSDA)
Security Exchange Board of India (SEBI) had asked depository participants (DPs) to make Basic Services Demat Account (BSDA) available for all retail investors. As per its circular in August 2012, this move was taken to achieve wider financial inclusion, encourage holding of demat accounts, and reduce the cost of maintaining securities in demat accounts for retail individual investors including those going in for initial public offer (IPO).
Who can open this account?
The BSDA promises to provide limited services at reduced costs to retail investors. All individuals who currently have one demat account or plan to open a demat account (where they are/will be the sole first holder) will be allowed to open a BSDA, provided that the value of securities held here will not be more than Rs 200,000 at any given point of time. Bear in mind that one is allowed to open only one BSDA across all DPs.
What are the charges?
The annual maintenance charges (AMC) that you will have to pay for maintaining the BSDA will be as per predetermined slabs. If the value of your holdings is up to Rs 50,000, there won't be any annual maintenance charge. However, if the value of your holding is between Rs 50,001 and Rs 200,000, you will have to pay a fee of Rs 100 as AMC.
Who decides the value?
SEBI has entrusted the DPs to determine the value of holding on the basis of the daily closing price or net asset value (NAV) of the securities or units of mutual funds. Note that if the value of your holdings exceeds the slabs mentioned above, DPs are permitted to charge you the same as they charge non-BSDA, regular demat accounts.
What about statements?
If you choose to avail the electronic statements, you won't have to pay anything. For physical statements, DPs have to provide two statements free of cost to you during the billing cycle. All additional statements will be charged a fee, which, however, cannot be more than Rs 25. You will get a transaction statement at the end of every quarter, provided there has been at least one single transaction in the quarter. For accounts where there are transactions, you will get an annual statement of holding as per your choice – electronically or physical.
What if you are an existing demat account holder?
If you are an existing eligible individual and hold a demat account with a DP, you can ask the DP to convert your demat account into BSDA on the date of the next billing cycle, based on the value of holding of securities in the account as on the last day of previous billing cycle.