Explore whether demat accounts in India require a minimum balance and what charges you should be aware of when holding one.
A demat account is crucial for participating in the Indian stock market. It holds your shares and securities in electronic form, replacing traditional paper certificates. While opening a demat account is a straightforward process, new investors often wonder whether they must maintain a minimum balance, like in savings bank accounts. This article clears the confusion by detailing whether demat accounts have a minimum balance requirement, explaining related charges, and outlining how different types of demat accounts function in this context.
Unlike a savings account, a demat account typically does not require a minimum cash balance to be maintained. However, this doesn’t mean the account is entirely free of charges. Depository Participants (DPs) — the intermediaries who offer demat services — may levy annual maintenance charges (AMC), transaction fees, and other charges depending on the type of demat account and the service provider's policy.
So, while there is no mandatory “minimum balance” in terms of money that needs to stay parked in your account, there are maintenance costs and other fees associated with holding and operating a demat account.
Even if there’s no explicit minimum balance rule, here are some important fees that may apply:
This is a yearly fee charged by many of the DPs to maintain your account. The amount may range from ₹200 to ₹800 depending on the service provider and the type of demat account. Some brokers offer zero AMC demat accounts for the first year or waive it entirely under specific conditions.
These charges are levied every time securities are debited or credited from the account. They may be charged per transaction or as a flat monthly fee.
If you use your demat shares as collateral for a loan, you may incur charges for initiating and removing the pledge.
Converting physical share certificates to digital form (dematerialisation) or vice versa (rematerialisation) involves processing fees.
While many DPs offer free demat account opening, some may still charge a nominal setup fee.
These charges are deducted from your linked bank account or from the funds in the trading account associated with your demat account.
Different types of demat accounts may have varying fee structures and requirements:
Most retail investors use this type. While there’s no minimum balance to be maintained, standard AMCs and transaction charges apply.
Designed for small investors, BSDAs are available if your holdings don’t exceed ₹2 lakh at any time. They offer reduced AMCs or even zero AMC for portfolios under ₹50,000.
Key Features of BSDA:
AMC is waived for holdings up to ₹50,000
AMC capped at ₹100 for holdings between ₹50,001 and ₹2,00,000
No special registration required — eligibility is automatically assessed by the DP
Some brokers offer demat accounts with no AMCs or lifetime free maintenance, usually under promotional offers. However, they may charge higher brokerage on trades or recover costs in other ways, so it’s essential to read the fine print.
The table below summarises how AMC charges differ by demat account type:
| Demat Account Type | AMC Requirement |
|---|---|
Regular Demat Account |
₹200 to ₹800 per year (varies by DP) |
Basic Services Demat Account (BSDA) |
₹0 for holdings ≤ ₹50,000; ₹100 max for ₹50K–₹2L |
Lifetime Free Demat |
May be ₹0 AMC (may have conditions) |
As seen above, the AMC depends not just on the account type but also on your holding value and the DP’s specific fee schedule.
Here are some essential points to keep in mind regarding demat account balances and charges:
Inactive demat accounts may still attract AMCs, even if you haven’t traded recently
Low or zero balance in the linked trading or bank account may delay payment of charges
Consolidate your demat accounts if you have multiple to reduce cumulative charges
Always review fee schedules before selecting a DP or broker
While there is no penalty for maintaining a low balance within the demat account itself, unpaid AMCs or transaction fees may lead to your account being frozen or services being temporarily suspended by the DP until dues are cleared. Also, non-payment may reflect in your credit history if left unresolved for a long time.
To help reduce account-related costs, consider the following:
Choose a broker with zero or low AMC if you trade occasionally
If eligible, convert your regular account to a BSDA to benefit from reduced charges
Close unused demat accounts to avoid redundant AMCs
Track your account statements to stay updated on debits and fees
Look out for promotional offers on demat account maintenance
There is no mandatory minimum balance requirement for holding a demat account in India. However, associated charges such as annual maintenance fees and transaction charges make it essential to keep your linked bank or trading account funded. The choice of demat account type — such as a BSDA or lifetime free demat — may influence the overall cost structure. Being aware of your DP’s fee structure and managing your accounts efficiently is the key to ensuring a cost-effective and seamless investment experience.
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
There is no requirement to maintain a minimum cash balance in a demat account, but account-related charges such as Annual Maintenance Charges (AMC) and transaction fees are still applicable.
Certain brokers offer demat accounts with zero Annual Maintenance Charges (AMC) or lifetime free AMC, and investors may also qualify for a Basic Services Demat Account (BSDA) that comes with reduced AMC.
If the Annual Maintenance Charges (AMC) are not paid on time, the demat account may be temporarily frozen, restricting the investor’s ability to trade or access their holdings until the dues are cleared.
A Basic Services Demat Account (BSDA) is not available to all investors and can only be opened if the total value of demat holdings does not exceed ₹2 Lakhs at any point in time.
All Depository Participants (DPs) are required to disclose their fee schedule, but certain costs such as pledge creation, dematerialisation, or rematerialisation may not be immediately apparent, making it important for investors to review the fine print carefully.