Home / Opinion / Online-views /  De-jargoned | Basic services demat account

As part of measures to make investing a part of your basic activities, the Securities and Exchange Board of India (Sebi) had announced on 27 August a basic depository facility or a demat account for investors. Let’s find out what this means for you. The change will be effective from 1 October 2012.

What is it?

You can of course avail this facility if you are yet to open a demat account, but you are also eligible for this if you already have a demat account and are the sole or first holder. But if you have another demat where you are a joint holder, not necessarily the first holder, then you will be eligible for BSDA terms only for the one (if you have) where you are the sole or the first holder. Sebi has specified that one person can have only one BSDA.

Specific conditions

Firstly, Sebi has specified charges that can be applied. For a holding value up to 50,000, there is no annual maintenance charge and for a holding value higher than that, the charge can be up to 100 only. The closing value of demat holding can be calculated on a daily basis by taking the market price or last traded price or in case of unlisted holdings, the face value. To take advantage of BSDA, you have to ensure that the market value of your demat holdings does not exceed 2 lakh on any day.

Secondly, Sebi has said that the transaction statement for this account needs to be sent every quarter and that, too, only if there have been transactions in that period and there is a balance in the account. But even if there is no transaction, an annual statement has to be sent to the holder. The good news is that there is no charge for electronic statements and for physical statements in one billing cycle, the first two are free. After that each statement can be charged a maximum of 25. Sebi also specifies that your mobile number should be registered so that SMS alerts on transactions can be sent by the depository.

So now at least for a basic account, the charges and services are known. If you want to open your first demat account, you already know what you will get and how much you need to shell out even before talking to your bank. If you already have a demat account, your depository should give you the option to convert to BSDA from the next billing cycle, depending on the value of your holdings or securities in the account.

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