What is Basic

Service Demat
Account?
INDEX.
Introduction.

Eligibility Criterial.

Charges.

Services.

Changes of statements.

Conclusion.
INTRODUCTION.
The Basic Services Demat Account
or BSDA is just a category of Demat
Account that a customer can open if
he/she meets certain criteria. BSDA
is also known as no-frills account.
BSDA can prove to be a very useful
tool for small investors. Basic
Services Demat Account (BSDA)
reducesthe cost of maintaining
securities in Demat accounts for
retail individual investors.
Almost 70% to 80% of the Demat
account holders do not trade actively.
The majority of them have little
investment in shares.

Still, they have to pay a hefty amount

for the annual maintenance charge.This
discourages them to have a Demat
account. To encourage small investors
SEBI has directed the Depositary
participants to open no-frills account
(BSDA) for the small investor.
Most of us who dont invest regularly in
stocks, bonds, gold ETFs, IPO, etc may
find maintaining Demat accounts a
pain because of the charges. The costs,
such as annual maintenance and
statement charges, make these
accounts relatively expensive.It
becomes a costly affair when you
invest a small amount in stock market
and still have to pay annual
maintenance charges (AMC) which are
usually in the range of Rs. 300 to 750
regardless of the amount in your
account.
For example, Assume that you have
invested Rs. 10,000 in stock market
& paying Annual Maintenance
Charges (AMC) of 300 to 750. Then,
in such cases, AMC is almost 5% of
your total investment.
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ELIGIBILITY
CRITERIA.
All the individuals who have or
propose to have only one Demat
account where they are the sole or
first holder are eligible to have a
BSDA provided that the value of
securities held in the Demat
account does not exceed Rupees
Two Lakhs at any point of time. An
individual can have only oneBSDA
in his/her name across all
depositories.
CHARGES.
The Annual Maintenance Charges
(AMC) structure for BSDA is based
on a slab basis; if the value of
holding is

up to Rs. 50,000, then there will

be no AMC i.e, Investor need not to
pay any annual maintenance
charge

for value of holding from Rs

50,001 to Rs 200,000, there will be
AMC of Rs. 100.
The value of holding shall be
determined by the DPs on the
basis of the daily closing price. If
the value of holding in such BSDA
exceeds the prescribed criteria at
any date, the DPs may levy charges
as applicable to regular accounts
(non-BSDA) from that date
onwards.
SERVICES.
BSDA will offer limited services and
reduced costs compared to
conventional Demat accounts. By
using BSDA you can invest in stocks,
IPOs, bonds and gold ETFs. You can
use trading tools, Softwares and
other basic services of the DP. The
only difference is in services
regarding statements.
CHARGES OF
STATEMENTS.
If you choose to avail the electronic
statements, you wont have to pay
anything. However, for physical
statements, DPs will provide two
statements free of cost to you
during the billing cycle. But
additional statements will be
charged a fee, which cannot be
more than Rs25.

So this is what SEBI wanted to help

retail investors with.
If you are an existing eligible
individual and hold a Demat
account with a DP, you should ask
the depository participant(DP) to
convert the account into a basic
services account. DP wont tell you
about BSDA, so you have to ask the
DP to convert your account into
BSDA.
Actually, many investors dont even
know that such an account actually
exists. Existing Demat holder can
move to BSDA from the next billing
cycle if their holding is within
Rs.2,00,000 limit. You must check
your annual reports to know
whether AMC charges are in line
with SEBI regulations. If your DP is
charging more then you can
complain to SEBI.
The moment your portfolio value
crosses the limits DPs will charge
you the fees according to the
respective slab i.e, Whenever your
holding will cross 50,000 (but less
than 2 lakh) then you will fall into
Rs. 100 AMC slab and when your
holding will cross 2 lakh then your
account will be converted into
regular Demat account. Once the
holding goes above 2 lakh, you
again cant roll back to BSDA.
You can open multiple regular
Demat accounts, but you cannot
have multiple BSDA i.e, You
should have only one BSDA in
your name across all
depositaries.
CONCLUSION.
BSDA is suitable for small
investors who invest for long term
& trade rarely(2-3 times a
year). But it is not suitable for
traders because some brokers
charge between Rs. 30 to 60 for
every sell side transaction for
BSDA accounts.
As shown in the picture below,
you can clearly see the extra
debit transaction charges HDFC
charging to the BSDA holders.
So it is not affordable for the small
investors who trade frequently. But,
if you are a small investor who
invest for the long term & trade
rarely(2-3 times a year) then you
should be thankful of SEBI.
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