What are the different types of DEMAT Account?

There are various types of Demat accounts designed to meet the diverse needs of investors. An investor can choose and open a Demat account with a broker based on their specific requirements. Below are the different types of Demat accounts that can be opened with a broker:

Regular Demat Account:

This account is designed for resident Indian investors who trade in equities. It is used to store securities electronically. When you buy or sell shares, they are credited to or debited from this account accordingly. However, if you’re only trading in derivatives (Futures & Options), a Demat account isn’t required, as those contracts don’t involve delivery of shares.

1. Basic Services Demat Account (BSDA): Introduced by SEBI to encourage small investors, a BSDA has low or zero annual maintenance charges. If your holdings are below ₹50,000, there are no maintenance charges. If they range between ₹50,000 and ₹2 lakh, charges are capped at ₹100. This type of account is ideal for beginners or investors with limited capital.
2. Repatriable Demat Account: This account is meant for Non-Resident Indians (NRIs) who want to invest in the Indian market and repatriate their funds abroad. To open a repatriable account, an NRI must also have an NRE (Non-Resident External) bank account. It allows full fund transfer outside India, subject to RBI and FEMA guidelines.
3. Non-Repatriable Demat Account: Also for NRIs, this account is linked to an NRO (Non-Resident Ordinary) bank account. While NRIs can invest in Indian markets using this account, the funds cannot be freely repatriated to a foreign country.

SEBI has made it mandatory for investors to have a Demat account. You can’t trade in the Indian stock exchange if you don’t have a Demat.