Demat Account: Holding Securities in Electronic Form
Demat (Dematerialised) Account is an electronic account that holds securities — shares, ETFs, bonds, mutual funds, sovereign gold bonds — in digital form, replacing the physical share certificates that were standard before the Depositories Act 1996.
2 min read · Updated June 2026
Architecture: opened with a Depository Participant (DP), which is a SEBI-registered intermediary linked to one of two depositories — NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited). Most retail brokers (Zerodha, Groww, Angel, Upstox) are DPs of CDSL; HDFC Securities, ICICI Direct of NSDL. Demat account is paired with a Trading Account for buy/sell transactions on exchanges.
Charges: account opening (typically free with online discount brokers, ₹500-1,000 with full-service brokers), Annual Maintenance Charge (AMC, ₹0-750/year), DP charges per debit transaction (₹13-30 per ISIN per day, irrespective of quantity), pledge/un-pledge charges. Brokerage on equity delivery (some brokers ₹0, others 0.10-0.25%), intraday and F&O charges separate. STT (Securities Transaction Tax) applied automatically on trades.
Operations: required for all stock market trading, IPO applications via ASBA, mutual fund holding (in dematerialised form, optional — also held in folio form via AMCs), sovereign gold bonds, government securities (RBI Retail Direct), non-convertible debentures, REITs, InvITs. Beneficiary Owner Identification Number (BO ID — 16 digits) uniquely identifies each demat holder. Joint accounts allowed (max 3 holders). PoA (Power of Attorney) used to be common but largely replaced by DDPI (Demat Debit and Pledge Instruction) post 2022 SEBI norms.
BSDA (Basic Services Demat Account) is a SEBI-mandated category for small investors with security value below ₹4 lakh — AMC waived/reduced. Most DPs offer it on request. Always nominate beneficiaries (mandatory since 2022) — without nomination, account can get frozen. CMR (Client Master Report) from the DP is the standard proof of demat account details.
