Gone are the days when investors had to manage various documents and visit brokers’ offices to make an investment. With the introduction of the share market and SIP selection apps, investing has become easier than ever. These platforms not only offer convenience but also promise low-cost investing. However, many investors are unaware of the hidden charges associated with Demat accounts.
This article discusses the hidden fees charged by various platforms in Demat accounts and what you can do to minimise them.
What are Demat Accounts, and Why are they Important?
A Demat or Dematerialized account is a digital account that safely stores financial securities, including shares, mutual funds, and bonds. Opening a Demat account is necessary because it makes investing safe, eliminates the need for physical certificates, speeds up transactions, and allows users to make investments from the comfort of their homes.
Common Hidden Charges in Demat Accounts
Understanding the Demat account charges by share market apps is essential for making informed decisions, and here are some of them:
- Opening Charges: Opening a Demat account includes various steps, and there are various platforms that charge a nominal one-time fee. Look for apps that are trustworthy and claim zero-cost account opening.
- Account Maintenance Charges (AMC): This is an annual fee charged by online platforms for maintaining your account. While some brokers offer free services for a certain period, it is essential to understand all the terms and then make the right decision.
- Transaction Fee: Brokers charge a transaction fee whenever you buy or sell securities. This is a brokerage fee, which is generally a percentage of your transaction value and differs from Demat app to app.
- Debit Transaction Charges: This fee is deducted by depositories, like NSDL or CSDL, whenever shares are debited from your account. It is charged based on number of shares you sell.
- Other Charges: It is essential to understand several other fees, including freeze, unfreeze, rematerialisation, account closure, and other hidden charges.
Tips to Minimise the Demat Account Hidden Charges
Follow the tips mentioned below to reduce unnecessary charges and make the investing process budget-friendly:
- Research and Compare: Before making any decision, make sure you compare the fees and charges charged by different Demat apps and look for the platform that offers the best value and suits your preferences. Take your time to do the research and choose the best option.
- Monitor Your Account: Online platforms allow users to manage their portfolios and analyse all the transactions. Make sure you take full advantage of it and track your transactions to identify unexpected deductions. Enable notifications to receive alerts every time a transaction is made from your account.
- Avoid Multiple Accounts: Don’t open multiple Demat accounts, especially those you’re not using, to avoid unnecessary maintenance charges.
- Look for Free Account Options: There are many trusted Demat apps that charge minimal to no account opening fees and offer affordable subscription plans, making it accessible for everyone to use.
Final Thoughts
Investing in financial securities via online platforms has never been easier. They help users make safe investments, earn high returns and eliminate the need to maintain lengthy paperwork. However, choosing the right online Demat apps like Bajaj Finserv is necessary to enhance your experience and make it worthwhile. Bajaj Finserv not only allows zero-cost account opening but offers 1 year of free services, charges lower brokerage fees, offers affordable subscription plans and is committed to complete transparency of transactions.
Being aware of these fees can help you make smarter decisions. Follow the above-mentioned tips to minimise charges and make the journey cost-effective and rewarding.
