Lifetime Free Demat Account (AMC Free)

A Demat (Dematerialised) account is used for holding and transacting securities in electronic form in India. Such accounts typically involve maintenance-related charges, including an Annual Maintenance Charge (AMC), which is levied by the depository participant for account-related services.

Some brokers and depository participants offer arrangements described as a “lifetime free Demat account,” generally referring to an AMC waiver under specific terms. These offers differ across providers in scope, duration, and eligibility conditions.

AMC is an annual fee charged by a depository participant for maintaining a Demat account and providing related services. These services may include:

• Safekeeping of securities in electronic form

• Record maintenance with the depository (NSDL or CDSL)

• Processing of debit and credit transactions

• Issuance of periodic account statements and alerts
   

AMC amounts vary across providers and account categories and are disclosed in the DP’s official tariff schedule.

When a Demat account is described as “lifetime free,” it typically refers to an arrangement where the Annual Maintenance Charge is waived under defined conditions. Depending on the provider, this waiver may apply:

• For as long as specified usage or balance-related criteria continue to be met

• For a limited duration, after which AMC may apply

• As part of a bundled pricing or subscription structure
   

The term “lifetime” is defined by the service provider and may refer to the duration of the account relationship, a specific plan, or the validity period of the offer, as stated in official documentation.

A zero AMC Demat account (also referred to as a 0 AMC Demat account) removes the annual maintenance charge that is otherwise levied by a depository participant for maintaining a Demat account. Since AMC is a fixed, recurring fee, its absence alters the overall cost composition of holding securities in electronic form.

Cost-related effects of zero AMC include:

• Elimination of a recurring fixed fee
  In standard Demat accounts, AMC is charged annually regardless of transaction activity. A zero AMC Demat account excludes this specific charge from the account’s fee structure.
  

• Effect on long-term account holding costs
  Over multiple years, the absence of AMC changes the cumulative charges associated with maintaining a Demat account, particularly when the account remains active for extended periods.
  

• Cost structure for low-transaction accounts
  For Demat accounts with limited debit activity, the proportion of costs attributable to AMC is higher compared to transaction-linked charges. Removing AMC shifts costs to usage-based charges only.
  

• Predictable cost structure
  With AMC not applied, Demat-related expenses primarily arise from transaction charges, statutory levies, and service-specific fees rather than fixed annual maintenance costs.
   

A zero AMC Demat account impacts only the annual maintenance component. Other applicable charges, such as transaction fees, pledge-related charges, and statutory taxes, continue to apply as per the depository participant’s published tariff schedule.

Eligibility conditions for AMC waivers vary across brokers and depository participants. Based on provider disclosures, such conditions may relate to factors such as:

• Initial investment or account funding thresholds

• One-time account opening or account charges

• Linking of the Demat account with a trading account

• Minimum transaction activity over a defined period

• Maintenance of a specified portfolio value

• Participation in bundled products or service plans
   

The exact criteria are outlined in the provider’s tariff and terms of service.

Waiver of the Annual Maintenance Charge does not eliminate all costs associated with operating a Demat account. Several transaction-linked, service-based, and statutory charges may continue to apply depending on usage and the depository participant’s tariff structure.

• Transaction Charges
  Depository Participants (DPs) may levy charges when securities are debited from the Demat account, such as during sale, off-market transfers, or inter-depository transfers. These charges are often applied per ISIN and per transaction, as defined in the DP’s tariff sheet.
  

• Pledge and Unpledge Charges
  When securities are pledged or released as collateral for margin trading or loans, depositories apply standard pledge-related fees. These are charged per instruction and are independent of AMC status.
  

• Dematerialisation and Rematerialisation Fees
  Charges may apply when converting physical share certificates into electronic form (Dematerialisation) or converting Demat holdings back into physical certificates (rematerialisation). These fees are typically levied per certificate or per request.
  

• Custodian or Holding-Related Charges
  Certain categories of securities, such as government securities or specific non-equity instruments, may incur additional custody or holding charges, depending on the depository and DP arrangement.
  

• Statutory and Regulatory Levies
  Mandatory charges such as Goods and Services Tax (GST), stamp duty, and depository-level fees prescribed by NSDL or CDSL continue to apply. These are regulated charges and are not waived under AMC-free arrangements.
  

• Account Closure or Transfer Charges
  Some DPs apply fees when a Demat account is closed or when securities are transferred to another DP. This may include account closure processing charges or per-ISIN transfer fees.
  

• Statement and Communication Charges
  While electronic statements are commonly provided without charge, physical statements or additional communication services—such as duplicate statements or courier delivery—may incur fees in certain cases.
  

• Dormancy or Reactivation Charges (if applicable)
  In some tariff structures, accounts classified as dormant for extended periods may incur reactivation or service charges upon resumption of activity.
   

These charges vary across providers and are disclosed in the DP’s official tariff sheet filed with the depository and SEBI. AMC waivers typically apply only to account maintenance and do not alter the applicability of transaction-based or statutory costs.

Demat accounts with an AMC waiver differ from standard accounts primarily in how recurring maintenance charges are applied. Key structural aspects include:

• The absence of an annual maintenance fee during the waiver period

• Ongoing applicability of transaction-related and statutory charges

• Cost differences that depend on account activity rather than fixed annual fees
   

These characteristics describe how AMC-free arrangements alter account pricing without affecting other operational charges.

Demat accounts with AMC waivers may also involve certain limitations, depending on provider terms:

• AMC may be reinstated if specified conditions are not met

• Waivers may be linked to paid plans or bundled services

• Account transfer or closure charges may apply

• Transaction, statutory, and service-related fees remain applicable

AMC-free Demat account arrangements are governed by terms defined by the service provider and applicable regulatory disclosures. These typically specify:

• How the duration of the AMC waiver is defined

• Conditions under which the waiver continues or lapses

• Circumstances where AMC may be reintroduced

• Whether the arrangement is permanent or promotional

• Applicable disclosures filed with SEBI and the depositories

Selecting a Demat account involves comparing structural features and cost components rather than relying on promotional labels such as “lifetime free.” Since Demat accounts are regulated by depositories and SEBI, the core function remains standard across providers, but account-level terms can vary.

Key aspects that are typically reviewed while comparing Demat accounts include:

• AMC Structure and Waiver Conditions
  Some accounts offer AMC waivers subject to defined conditions, while others follow a fixed annual charge model. Understanding how AMC is calculated, waived, or reinstated helps clarify long-term account costs.
  

• Account Opening and One-Time Charges
  Certain providers may charge a one-time setup or onboarding fee even when AMC is waived. These charges are disclosed in the tariff sheet and vary across depository participants.
  

• Transaction-Related Fees
  Demat debit charges, pledge and unpledge fees, and rematerialisation costs may apply regardless of AMC status. These fees influence the overall cost of operating the account.
  

• Account Usage Requirements
  Some Demat accounts are linked to minimum activity levels, portfolio value thresholds, or mandatory trading account linkage. These conditions can affect whether AMC benefits continue.
  

• Service and Access Features
  Factors such as online account access, statement frequency, integration with trading platforms, and customer support channels differ by provider and influence account management experience.
  

• Transfer and Closure Charges
  Charges for closing a Demat account or transferring securities to another DP may apply and are usually outlined in the official schedule of charges.
   

Reviewing these parameters allows for a clearer comparison between Demat account offerings based on structure, charges, and operational terms, rather than relying solely on headline claims or promotional descriptions.

A lifetime AMC-free Demat account refers to a pricing structure where the Annual Maintenance Charge is waived under defined terms. Such arrangements differ across providers in duration, eligibility, and applicable conditions. While AMC may be waived, other Demat-related charges continue to apply as per the tariff schedule. Reviewing how these waivers are structured helps clarify their scope within the broader Demat account framework.

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.