My search for Demat Account was started in 2012 after getting my first job. My father was already investing a lot in the stock market, so I was excited to invest in it.
I had my salary account with ICICI bank and so did my father. It was easy to get a Demat and trading account with ICICI bank. But, the ICICI Demat account was charging a lot. So, I decided to switch the account with some other.
And at that time, Sharekhan ads were played on the TV, so I preferred Sharekhan over any other.
Sharekhan charged me the brokerage of 0.5% on delivery and 0.1% on intraday!
But later, I realized that the Sharekhan account imposes many charges for trading and delivery of shares into account. Then I found best Demat accounts with Zero Brokerage on delivery, which means I have to pay no brokerage for long term investing. Isn’t it amazing?
In this article, I will explain the Demat account’s basics, the difference between Demat and trading accounts, and discuss the best Demat accounts.
Difference Between Demat and Trading Account
A trading account is used to place buy or sell orders in the stock market. Demat means are dematerializing shares into digital format rather than on physical paper.
The Demat account is used as a bank where shares are bought and deposited. You will get a single account for Demat & trading.
Best Demat Account with Lowest Brokerage in India 2020
#1. Zerodha Demat Account
Zerodha is the largest and most trusted discount broker having the average daily trading transaction of over Rs 10,000 crore. Zerodha is best for small investors because there are no minimum charges of brokerage per trade. The brokerage rate is 0.01% or Rs 20 per executed order, whichever is lower.
Suppose you trade a significant volume even then you will have to pay only Rs 20 per trade. You can save up to 90% as compared to other full-service brokers—no charges on delivery. Zerodha’s customer support is better than the other discount brokers in India.
- Delivery is free.
- No minimum cap of brokerage per transaction.
- Maximum brokerage charge capped to Rs 20 irrespective of transaction volume.
- Provide a margin from 4 to 12.5 times.
Zerodha Brokerage Charges
- Equity Delivery- zero brokerage
- Equity Intraday- 0.01% or Rs 20/per trade whichever is lower
- Equity Futures- 0.01% or Rs 20/per trade whichever is lower
- Equity Options- flat Rs 20 per trade.
#2 5Paisa Demat Account
5 Paisa is the fastest growing discount broker in India. It is backed by leading financial service company-IIFL. It has three trading platforms through mobile, web, and desktop. You can manage your account, watchlist, and trade. You can also invest in mutual funds through the all in one trading account more than equity, derivatives, and currency. You may also open an account for mutual funds only.
You only need to pay flat Rs 10. per trade with platinum and titanium. You can place a single deal worth crores and pay Rs 10 per trade. You would get your 5Paisa account opened on the same day on submitting all the documents.
- Invest in Mutual Funds and buy insurance through the same account
- 100% waiver on account opening charges – A saving of Rs. 650
- Maintenance Charges – Rs. 45 per month only for months when you trade.
5Paisa Brokerage Charges
5Paisa offers three subscription plans, namely the Optimum, Platinum, and Titanium Plans.
If you want to become an active trader and trade with margins, a Upstox trading account is ideal. You can get a 15x to 25x margin in the cash segment depending on the account type and type of orders. If you are looking for low brokerages, high margins, and right trading platforms, you must open your account with Upstox.
Upstox has fixed brokerage of Rs. 20 per trade for intraday irrespective of the trading volume. You need to pay zero brokerage for delivery—huge savings compared to other full brokers.
Advantages of Upstox Trading Account
- No brokerage charges for delivery
- Great trading platforms
- Fix & low brokerage irrespective of trade volume
Upstox Trading Brokerage Charges
- Equity Delivery: Rs. 0
- Equity Intraday: Lower of Rs. 20 per executed order or 0.01%
- Equity Futures: Lower of Rs. 20 per executed order or 0.01%
- Equity Options: Rs. 20 per executed order
- Currency Futures & Options: Lower of Rs. 20 per executed order or 0.01%
- Commodity F&O: Lower of Rs. 20 per executed order or 0.01%
#4. Angel Broking Demat Account
Angel broking is one of the oldest brokerage companies in India, having established network branches in over 900 cities. At present, angel broking provides service to more than 10,00,000 customers. Angel broking’s customer care service is up to the mark. I recommend Angel Broking only if your Adhaar Card is linked with your mobile number. You can complete your entire application online and start trading after verifying your identity with Aadhaar OTP.
- Flat brokerage fees
- Excellent trading software’s and investment advisory
- The user-friendly browser and application-based online trading platforms
- Comprehensive research reports from expert
- Charges for delivery trades
- Call & trade is charged additionally – Rs. 20 per call.
- Customer service is average as their turn around time is higher.
#5. Sharekhan Demat & Trading Account
Sharekhan is one of the big stockbroking firms with an international presence through its branches in the UAE and Oman. Sharekhan is one of the leading online brokerage companies having more than 12 lakh customer base. Presently the company has provided service from more than 1800 offices across 550 cities.
If you are a small investor, then it is the best suitable option for you.
Sharekhan Trading Brokerage Charges:
- Trading account opening charges – Rs 750 for a definitive account, Rs. 1000 for Trade Tiger A/c.
- Demat Annual Maintenance Charges- Rs 400 (free for 1st year with trading account)
- For equity intraday trading, the brokerage charge – 0.1% for both buy and sell sides.
- For equity delivery trading, the brokerage charge – 0.5% or ten paise per share or Rs 16 per scrip whichever is higher.
- Account opening charges are adjusted towards first six months brokerage or waived off
- No annual maintenance charge for the first year
- Sharekhan provides online & offline training workshops to investors
- Free call & trade facility
- A minimum brokerage charge per stock would reduce your profit on trading small (penny) stock.
- The brokerage rate is higher as compared to other Demat companies. But you can negotiate at the time of account opening.
#6. Religare Demat Account
Religare Securities Ltd. (RSL) is a wholly-owned subsidiary of Religare enterprise. RSL is a diversified financial service group that serves more than 8 lakh across online and offline platforms.RSL offers broking services in equity, currency, and commodity, along with depository participant services. You can avail lifetime AMC free account with a one-time payment of Rs.2500.
- Demat Account Opening Charges – Nil
- Trading Account Opening Charges – Nil
- First Year Annual Maintenance Charges – Nil
- Annual Maintenance Charges From 2nd Year – Rs 500
Religare Demat & Trading Account Brokerage Charges
- Intraday Charges – 0.05%
- Delivery – 0.50%
- RSL provides a mobile trading platform to place orders anytime from anywhere.
- It provides a facility of investing in equities, derivatives, currency, futures, commodities, and mutual funds through a single account.
● It provides intraday reporting and historical charting.
- Charge Rs 10 per offline order with a maximum limit of Rs 50 per day.
#7. Motilal Oswal Demat Account
Motilal Oswal provides a vast number of services such as private wealth management, retail broking, and distribution, institutional broking, asset management, investment banking, private equity, commodity broking, currency broking, principal strategies & home finance. Presently the company has more than 1700 business locations with over 7.5 lakh registered customers. Motilal Oswal’s solid research-based advice is the reason for such a strong customer base.
They spend Around 10% revenue on research and hiring & training for research.
- Demat Account Opening Charges – Rs 0
- Trading Account Opening Charges -Rs 0
- Annual Maintenance Charges – Rs 400.
- It provides free brokerage for the first month.
#8. Ventura Securities
Ventura is a full-service broking company that provides service to clients to invest in equity, equity derivatives, commodities, mutual funds, fixed income products, and currency futures. Their web-based online trading platform is not as mature as Angel & Sharekhan, but they provide excellent support over the phone.
Their windows based trading platform is also good. You will need a little trading before starting your trading on their platform.
- Trading Account Opening Charges – Rs 150
- Demat Account Opening Charges – Rs 300
- First Year Annual Maintenance Charges – Nil
- Demat Account Annual Maintenance Charges – Rs 400
- Trading Account Annual Maintenance Charges- Nil
- It offers a wide range of financial products to invest, including equity, equity derivatives, commodities, mutual funds, fixed income products, and currency futures.
- First-year AMC is free.
- The mobile app makes trading more user friendly.
- You have to deposit a fixed yearly fee based on your plan along with the brokerage. The amount is refundable only if you generate a similar amount of brokerage for Ventura in a year.
#9. ICICI Direct Demat and Trading Account
ICICI direct is one the largest share brokerage company having more than 20 lakh customers. ICICI Direct provides a wide range of services and investment options, including investment in equities, derivatives, mutual funds, SIP, IPO, NCD & bonds, ETF, and currency, Wealth products, and home loans & loans against securities.
If your trading volume is low, then the ICICI Direct account is best for you.
If you have an ICICI savings account and want to invest in IPO and Mutual Funds, it’s good to open a Demat account in ICICI.
If you open your account in ICICI bank, then you will get a 3-in-1 account Saving+Trading+Demat. And, it’s also easy to transfer in and transfer out money.
ICICI Direct Account Charges
- Account Opening Charges -Rs 975
- Annual Maintenance Charges – Rs 700
ICICI offers three types of brokerage plans
1) Saver plan: A variable percentage of brokerage gets charged based on quarterly turnover. Higher the turnover, lesser, will be the brokerage.
2) Secure Plan: A fixed percentage of brokerage gets charged on turnover. There are no turnover based slab rates like saver plan.
3) Prepaid Brokerage Plan: You have to pay prepaid brokerage under this plan. The brokerage rate is lesser as compared to the other two programs. But your money will be locked & not beneficial for seasonal traders or investors to close their cash.
#10. SBICap Securities
SBICap offers investment banking services which includes
- Capital Markets (including Public Issues, Rights Issues & Private Placement of Debt and Equity)
- Broking Services
- Financial Engineering
- Resource Mobilisation through Capital Markets
- Account Opening Charges -Rs 850
- Account Annual Maintenance Charges – Rs 800
SBICap Trading Platforms
- SBI Desktop Trading Software – This is a software called eZ-trade@sbi, which gets provided to all the clients trading with them. This software has to be installed on the computer.
- SBI Smart Trading Mobile App – This mobile app mobile allows SBI customers to trade in equities and derivatives through their mobile phones.
#11. HDFC Security
HDFC security limited is a subsidiary of India’s largest private bank HDFC. HDFC securities provide a 3-in-1 account which integrates your saving account, trading account, and Demat account.
- Account Opening Charges -Rs 0
- Account Annual Maintenance Charges – Rs 750 ( free for the first year)
HDFC Trading Platform
- Web-Based Trading – This is a web-based trading platform called “Securities trading and Securities processing.” HDFC is one of the best e-brokerage platforms. It provides real-time market data and trading options.
- HDFC Securities Mobile Trading – HDFC mobile platform allows trading in equities and derivatives through their mobile phones.
- Due to integrated accounts, funds can quickly transfer from one account to another. Only helpful for HDFC saving account customers.
- High brokerage rate as compared to discount brokers.
- HDFC security doesn’t offer service in the commodity market.
- If you are a new customer to HDFC, you have to open the savings account.
❏ What Is a Demat Account?
Demat account is an account that is used to hold shares and securities in electronic format. The full form of the Demat account is a dematerialized account. The purpose of opening a Demat account is to hold stocks that have been bought or dematerialized (converted from physical to electronic shares), making share trading easy for the users during online trading.
❏ How to Open Demat Account?
#Step 1. Select where you want to open a Demat Account and select the Depository Participant with whom you want to open a Demat account. Most brokerages and financial institutions offer the service.
#Step 2. Then fill up an account opening form and submit along with copies of the required documents and a passport-sized photograph. You also need to have a PAN card. Also, carry the original documents for verification.
#Step 3. You will be provided with a copy of the rules and regulations, the terms of the agreement, and the charges you acquire.
#Step 4. During the process, an In-Person Verification would be carried out. A member of the DP’s staff would contact you to check the details provided in the account opening form.
#Step 5. Once the application is processed, the DP will provide you with a Demat account number and a client ID. You can use the details to access your Demat account online.
#Step 6. As a Demat account holder, you would need to pay some fees as the annual maintenance fee that will be used for maintenance of the Demat account and the transaction fee — levied for debiting securities to and from the account every month. These fees differ from every service provider (called a Depository Participant or DP). While some DPs charge a flat fee per transaction, others secure the transaction value’s cost and are subject to a minimum amount. The price also differs based on the kind of purchase (buying or selling). Other fees have the DP charging a fee for converting the shares from the physical to the electronic form or vice-versa.
#Step 7. Minimum shares: A Demat account can be opened with no balance of stocks. It also does not require a minimum balance to be maintained.
❏ How to Use a Demat Account?
#Registration: You must first register with an investment broker or sub-broker to open a Demat account. Once the account is opened, you will get a transaction password.
#Choose a depository: Depositories are institutions that hold a pool of shares that have been pre-verified in the electronic form. There are currently two depositories in India—the National Securities Depositories Limited (NSDL) and the Central Depository Services Limited (CDSL).
#Be prepared for in-person verification: Upon receipt of the documents, the DP will send an official to perform an in-person check.
#Receipt of your Demat account number: Once the in-person verification gets completed, you will receive an account number or client ID. Using this along with the transaction password, you can access your Demat account. You may use your Demat account to trade shares, derivatives, and stocks. You can also use it as a storehouse for your stock portfolio.
#Open a trading account: To buy or sell shares, you need a trading account and stockbroker alongside your Demat account. Your trading account will show the history of trading related to a specific account.
#Transferring shares to your Demat account: After the trade accomplishment and confirmation from the stock exchange, it will take T+2 days to show up in your Demat account. Your stockbroker is responsible for transferring the shares to your Demat account after payment has been made to the stockbroker.
#Power of Attorney and your Demat account: You must read through the terms and conditions when you open a Demat account. Be careful about giving the power of solicitor (POA) to a broker. The POA provides the broker with the authority to issue debit/credit instructions from your Demat account. Moreover, the broker may have a clause in the Demat agreement that it does not need to provide debit instruction slips (DIS) to the account holder. So, you must go through the fine print of your Demat agreement. Examine all the clauses mentioned before, giving the POA to a broker.
#Importance of the Debit Instruction Slip: The debit instruction slip (DIS) is like a cheque book. Every time you sell or transfer shares, it is recorded in the DIS. So, you must keep the DIS in safe custody.
❏ Can shares be traded without a Demat account?
It is now mandatory for all investors to have a Demat account if they wish to trade in the securities market. Since 5 December 2018, the Securities and Exchange Board of India (SEBI) has mandated that the transfer of securities no longer occur in the physical form.
However, when it comes to trading commodities, derivatives, and exchange-traded funds, you do not necessarily need a Demat account.