All you need to know about Basic Services Demat Account

Security Exchange Board of India (Sebi) had asked Depository Participants (DPs) to make “Basic Services Demat Account” (BSDA) available for retail investors. As per its circular posted on Sebi’s website in August, this move was taken to achieve wider financial inclusion, encourage holding of demat accounts and to reduce the cost of maintaining securities in demat accounts for retail individual investors. As per Sebi, DPs’ will have to offer such BSDA from today.

**Who can open such accounts:**The “Basic Services Demat Account” (BSDA) promises to provide limited services at reduced costs to retail investors. All individual who currently have one account or plan to open an demat account where they are the sole first holder will be allowed to open the BSDA, provided that the value of securities held here will not be more than Rs2 lakh at any given point of time. Keep in mind that you are allowed to open only one BSDA across all DPs.

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[caption id=“attachment_432541” align=“alignleft” width=“380”]  The Sebi logo. Image courtesy Sebi[/caption]

What are the charges: The Annual Maintenance Charges (AMC) which you will have to shell out for BSDA will be as per predetermined slabs. If the value of your holdings is up to Rs 50,000 there won’t be any annual maintenance charge. However, if the value of your holding is in between Rs 50,001 to Rs 200,000 you will have to pay a fee of Rs 100 as AMC.

Who decides the value: Sebi has entrusted the DPs to determine the value of holding on the basis of the daily closing price or Net Asset Value of the securities or units of mutual funds. Keep in mind that, if the value of your holdings exceeds the slabs mentioned above, DP’s are permitted to charge you the same as they charge non- BSDA regular demat accounts.

What about statements: If you choose to avail the electronic statements, you won’t have to pay anything. However, for physical statements, DPs have to provide two statements free of cost to you during the billing cycle. But addition statements will be charged a fee, which cannot be more than Rs25. You will get a transaction statement at the end of every quarter, provided there has been at least a single transaction in the quarter. For accounts where there are transactions, you will get an annual statement of holding, as per your choice, that is electronically or physical.

What if you are an existing demat account holder:

If you are an existing eligible individual and hold a demat account with a DP, you can ask the DP to convert your demat account into BSDA on the date of the next billing cycle based on value of holding of securities in the account as on the last day of previous billing cycle.

Other details: These BSDA will also offer SMS alert facility for debit transactions.