What is Demat Account
A demat account – short for dematerialised account – is convenient for any regular investor. While initially meant only for storing equities electronically, you can now hold mutual fund units, bonds, debentures and national savings certificate. If all goes according to plan, perhaps you’ll be able to control your insurance policies here, too.
Its best use, now that you can have control online, is that you can make changes at your convenience. You can simply log in and transact in shares. It also gives you access to certain investments that would not be beyond reach without it. ETFs and NCDs, for example, require an active demat account.
The service is offered by depository participants (DPs), which can be banks, trading houses and other financial institutions. Here’s a list of their charges and fees.
As per Basic Services Demat Account, introduced by SEBI in August 2012, no annual maintenance charge will be levied on an account in which the holdings do not exceed Rs50,000. There is no restriction on how many accounts you can hold: