What is a Basic Service DEMAT Account?
Basic Service Demat Account (BSDA) is a special type of account that can be opened by only individual investors.
What is the eligibility criteria of BSDA?
1. The investor should be the sole owner of the account.
2. The investor should not have any other Demat account
3. Only one Demat account can be held under the BSDA category.
4. The total value of the BSDA shares should not exceed Rs. 2 lakh at any point
5. If the investor has a joint account, he/she should not be the first holder of the account.
DEMAT accounts can incur a lot of charges. BSDA reduces the burden to investors who have a DEMAT account with smaller portfolios of below Rs. 200,000 Lakhs. SEBI has barred account opening charges for credit to DEMAT account.
What are the charges levied on BSDA?
The charges on BSDA are levied based on the value of the securities in the account.
1. Annual maintenance charges (AMC): If the value of the holding is below Rs. 50,000, no AMC is levied. For a holding value between Rs. 50,000 to Rs. 2 lakh, AMC can be up to Rs. 100. If the value of holding exceeds Rs. 2 lakh, the AMC is same as levied on non-BSDA.
2. Physical statements: Two hard-copy statements are provided free of cost during the billing cycle. Additional statements can incur a fee of about Rs. 25.
3. Additional charges: Some of these include, bounce charges, rejection of a Delivery Instruction Slip (DIS) and rejection of a Demat Request Form (DRF).
Can you convert your regular DEMAT Account to BSDA Account?
Yes, you can convert your Demat account into a BSDA Account if your account holding is low. A Demat Account is automatically converted into a BSDA account it meets the criteria, if the account holding is consistently below the threshold of Rs. 200,000 and it is the only Demat account held by the individual investor.
What are Annual maintenance charges for converted accounts?
If a Demat account is converted into a BSDA, the Annual Maintenance Charges can be up to Rs. 100 + GST. If the account holdings during a year were above Rs 200,000, the AMC is levied can be up to Rs. 300 + GST.
If at any point, the account holdings of BSDA the threshold value or if the holder opens another Demat Account, the BSDA Account is converted into a regular Demat Account.