Things You Need to Know About Zero Balance Demat Account
A stock market is an exciting place, and the convenience offered by a demat account only makes it all the more favourable to trade and invest. A demat account online comes with a host of benefits that make it swift and easy to use as it eliminates the hassle of having to go through needless documentation.
Published on 10 January 2022
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When you open a demat account, you are expected to maintain a minimum balance. However, not many are aware that there is a zero balance demat account that provides all the services of a traditional demat account without having to maintain a minimum balance.
Let us understand in detail what a demat account with zero balance entails and how can you secure one.
What is a Zero Balance Demat Account?
A traditional demat account in India has certain costs associated with it. which can be eliminated every year with an online zero balance demat . One of the primary benefits of a demat account with zero balance is that it does not compromise on the benefits and services that a regular demat account promises. A demat account with zero balance can be split into three sections for ease of understanding:
No Brokerage Across Segments In a regular demat account online, there are certain charges levied when trading with equity, debt, and other financial commodities of the capital market. However, with an online zero balance demat account. these financial commodities can be traded without brokerage charges. To avail of this facility which is unique to the zero balance demat account, one will have to find a trustworthy broker who offers this service.
No Brokerage for Delivery Trading In a regular demat account online, there are certain charges levied when trading with equity, debt, and other financial commodities of the capital market. However, with an online zero balance demat account these financial commodities can be traded without brokerage charges. To avail of this facility which is unique to the zero balance demat account, one will have to find a trustworthy broker who offers this service.
No Brokerage for Delivery Trading As the name suggests, this online zero balance demat account is one with zero brokerage fee for trading segments. Witnessing the burgeoning popularity of the Robinhood app in the USA, the regular demat account in India decided to replicate its success back home. The benefit of this demat account online is that it permits buying and selling individual stocks in cash while slashing the brokerage fee. Neophyte investors who are new to the capital market and are still learning about equity trading can benefit greatly from this zero balance demat account. It encourages them to advance with their investments in the share market with derivatives and intraday trading.
Discount Plans Who does not love a discount? And when it comes to investments, it is no surprise that these discounts will be appreciated even more. Before you open a demat account, it is highly recommended that you check the monthly and yearly plans that run all year round. These plans usually come with heavy discounts and enticing deals that are highly beneficial for regular investors in the stock market who trade in high volumes. Also Read: Why is discount Broking popular in India?
Finding a Zero Balance Demat Account in India
With the enticing propositions of an online zero balance demat account, every investor will want to reap its benefits. However, finding this kind of a demat account in India is slightly challenging. Here are a few tips to finding a demat account with zero balance: -
Enlist the Brokerage Firms: When you seek to open a demat account, you will realize that several firms offer a demat account. However, the benefits of the zero balance demat account are relatively fewer. This is why before opening a demat account, you must undertake adequate research about the types of demat account online. Also Read: Various Types of Trading Accounts & Demat Accounts.Also, bear in mind that once you open a demat account that offers zero-balance services, they can be chargeable later on.
Compare Plans: Compare the demat account offerings of different brokerages to ensure that you get your services at competitive rates. Additionally, when you look for a demat account online, watch out for the hidden costs that may not be mentioned by the broker upfront.
Examine the Pricing Structure: Finally, it is essential to be aware of the pricing structure when you open a demat account. The demat account online with zero balance facilities might still have costs such as GST and other transaction costs levied by the central depositories, which are separate from the broker and so might not be mentioned upfront.
To conclude
When looking for a zero balance demat account, read all the documents, including the fine print carefully, and compare the plans offered by different brokers. Choose a plan that meets your long-term investment objectives, especially if you trade in the capital market regularly. Also Read: Documents required for opening demat account
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The stock market has witnessed a fascinating evolution. From close to a hundred years of traders ardently shouting on the trading floors to buy and sell shares, the capital market has become more accessible to investors with the introduction of a demat account in India.
Whether it is to hold, buy, or sell shares in the capital market, an investor needs to open a Demat account and a trading account with their chosen depository participant (DP). A Demat account allows investors to hold their shares and securities. For trading in India, however, an investor needs to open a trading account first. Before they begin trading in India, every investor needs to acquaint themselves with the different types of trading accounts and the types of Demat accounts that are catered to address the varied demands of the investors.
In India, a Demat account can be opened with a depository participant (DP). The National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) are the two depositories in India that offer depository services to market participants. These depositories have multiple depository participants that offer Demat accounts to people.
A demat account with zero balance offers the services of a regular demat account without charging any brokerage amount.
Formerly, the minimum balance required to open a demat account was ₹1,000. Now, however, the minimum amount can be anywhere between ₹0 to ₹500 depending on the depository participant.
Aside from the account opening charges, some other charges to maintain a demat account online are: -
Annual Maintenance Charges
Transaction charges behind every credit and debit
Charges for dematerialization and rematerialization of shares
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How Does Demat Account Work?
The stock market has witnessed a fascinating evolution. From close to a hundred years of traders ardently shouting on the trading floors to buy and sell shares, the capital market has become more accessible to investors with the introduction of a demat account in India.
Whether it is to hold, buy, or sell shares in the capital market, an investor needs to open a Demat account and a trading account with their chosen depository participant (DP). A Demat account allows investors to hold their shares and securities. For trading in India, however, an investor needs to open a trading account first. Before they begin trading in India, every investor needs to acquaint themselves with the different types of trading accounts and the types of Demat accounts that are catered to address the varied demands of the investors.
In India, a Demat account can be opened with a depository participant (DP). The National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) are the two depositories in India that offer depository services to market participants. These depositories have multiple depository participants that offer Demat accounts to people.
A demat account with zero balance offers the services of a regular demat account without charging any brokerage amount.
Formerly, the minimum balance required to open a demat account was ₹1,000. Now, however, the minimum amount can be anywhere between ₹0 to ₹500 depending on the depository participant.
Aside from the account opening charges, some other charges to maintain a demat account online are: -
Annual Maintenance Charges
Transaction charges behind every credit and debit
Charges for dematerialization and rematerialization of shares
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