When it comes to investing in the stock market, opening a Demat account is a crucial step. A Demat account is a digital repository where you can store your securities in electronic form. However, it’s essential to understand that there are various hidden brokerage charges associated with Demat accounts that you need to be aware of before opening one.
Brokerage Charges: Brokerage charges are fees that brokers charge for buying and selling securities on your behalf. Brokerage fees can be either a fixed percentage of the trade value or a flat With respect to the idea of trading apps, brokerage charges can vary from broker to broker and also vary according to the type of security you’re trading.
Account Opening Charges: Most brokers charge a fee for opening a Demat account. This fee can vary from broker to broker and can range from a few hundred rupees to a few thousand rupees. Some brokers may also waive off account opening charges if you fulfill certain conditions like maintaining a minimum balance in your account.
Annual Maintenance Charges: Brokers charge annual maintenance charges (AMC) for maintaining your Demat account. The AMC can vary from broker to broker and can range from a few hundred rupees to a few thousand rupees. The AMC is usually charged on a yearly basis and is deducted from your Demat account balance with the help of a trading app.
Transaction Charges: Brokers charge transaction charges for every transaction you make. The transaction charges can vary from broker to broker and can range from a few paise to a few rupees per transaction. The transaction charges are usually deducted from your Demat account balance with the help of a trading app.
Custodian Charges: Brokers charge custodian charges for the safe keeping of your securities in the Demat account. The custodian charges can vary from broker to broker and can range from a few paise to a few rupees per security per month. The custodian charges are usually deducted from your Demat account balance with the help of a trading app.
SMS and Email Charges: Brokers charge SMS and email charges for sending transaction alerts and monthly statements to your registered mobile number and email address. The charges can vary from broker to broker and can range from a few paise to a few rupees per SMS or email.
Inactivity Charges: Some brokers charge inactivity charges if there is no activity in your Demat account for a specified period. The inactivity charges can vary from broker to broker. They can range from a few hundred rupees to a few thousand rupees per year with the help of a trading app.
Other Charges: Apart from the charges mentioned above, there may be other charges like pledge charges, Power of Attorney (POA) charges, and delivery instruction slip (DIS) charges that may be levied by your broker.
It’s likewise necessary to note that the charges mentioned above are not exhaustive, and there may be other charges associated with your Demat account. Therefore, it’s crucial to read the fine print carefully and understand the charges associated with your Demat account before opening one with the help of a trading app.
