DEMAT ACCOUNT

Demat account, refers to a dematerialised account. For individual Indian citizens to trade in listed stocks or debentures. The Securities Exchange Board of India (SEBI) requires the investor to maintain a Demat account. In a demat account shares and securities are held in electronic form instead of taking actual possession of certificates ed to be in past. A Demat Account is opened by the investor while registering with an investment broker (or sub broker). The Demat account number which is quoted for all transactions to enable electronic settlements of trades to take place.

For online trading Access to the demat account requires an internet password and a transaction password as well as initiating and confirming transfers or purchases of securities. Purchases and sales of securities on the Demat account are automatically made once transactions are executed and completed

The demat account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and provides easy receipt of public issue allotments.

It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses

Demat Options

Banks score over others Around 200 “depository participants” (DPs) offer the demat account facility. A comparison of the fees charged by different DPs is detailed below. But there are three distinct advantages of having a demat account with a bank — quick processing, accessibility and online transaction. Generally, banks credit your demat account with shares in case of purchase, or credit your savings accounts with the proceeds of a sale on the third day. Banks are also advantageous because of the number of branches they have. Some banks give the option of opening a demat account in any branch, while others restrict themselves to a select set of branches. Some private banks also provide online access to the demat account. So, you can check on your holdings, transactions and status of requests through the net banking facility. A broker who acts as a DP may not be able to provide these services.

Fees Involved

There are four major charges usually levied on a demat account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP.

HERE IS THE LIST OF SOME OF THEM

ALLWIN SECURITIES LIMITED
DP ID : 64400 Address : B-205/206, RAMJI HOUSE 30, JAMBULWADI KALBADEVI ROAD MUMBAI 400002 MAHARASHTRA INDIA		Tel No: 022-43446444, Fax No : 022-43446410 Email ID : allwinsc@yahoo.com; kcma llawat@gmail.com

 

Statutory Charges at the time of Account Opening    RS.100 Advance / Deposit    RS. 300 Account Maintenance    RS. 200 Demat    RS.10PER CERTIFICATE +RS 50, RS 10+RS. 75 PER CERTIFICATE WHO ARE NOT BEING A CLIENT OF ALLWIN Remat    RS 15 PER 100 SECURITIES OR PART QUANTITY OR RS 15 PER CERTIFICATE WHICH IS HIGHER Transaction (Debit)    WITHIN ALLWIN 0.01% SUBJECT TO MINIMUMRS. 12 & MAXIMUM RS. 25, OUTSIDE ALLWIN 0.03% SUBJECT TO MINIMUM RS.25 Pledge Creation    RS.25 Pledge Creation confirmation     Pledge Closure     Pledge Closure confirmation     Pledge Invocation     Failed instruction charges    RS. 10 PER INSTRUCTION Other Charges    REJECT INST. RS 25/INST., A/C MODIFICATION RS. 50/- LATE FEE RS 20 PER INSTRUCTION

Remarks

FOR CORPORATE A/C AN ADDITIONAL CGS RS 500 FOR A/C MAINTENANCE WILL CHARGED, EXTRA A/C STATEMENT CGS RS 50/- IF NO OF PAGES EXEEDS 10 RS 5 PER PAGE WILL BE CHARGED EXTRA.

AMBIT CAPITAL PRIVATE LIMITED DP ID : 47500 Address : AMBIT RSM HOUSE, 449 SENAPATI BAPAT MARG LOWER PAREL MUMBAI 400013 MAHARASHTRA INDIA Tel No: 022-30433000, Fax No : 022-30433100 Email ID : shishirkarnik@ambitcapit al.com;rajeshsharma@ambitcapital.com

About Us Member of NSE and BSE, and a DP of CDSL Services provides securities brokerage, wealth management and related financial services. Tariffs Statutory Charges at the time of Account Opening    Nil Advance / Deposit    Nil Account Maintenance    Rs. 500 for accounts other than Corporate Rs. 1000 for Corporate accounts Demat    Rs. 5/- per certificate Rs. 30/- towards courier charges Remat    Rs. 10/- per certificate plus Rs. 30/- towards courier charges Transaction (Debit)    On-Mkt Transactions with other Brokers: @ 0.03% of of value (min Rs. 20) Off-Mkt (within Ambit ) only CDSL charges on actual Off-Mkt/Inter-Depository at .03% of value (min Rs. 20) Pledge Creation    Rs. 25/- per ISIN within Ambit Capital 0.02% of value Pledge Creation confirmation     minimum Rs. 25/- per ISIN outside Ambit Capital Pledge Closure    Nil Pledge Closure confirmation    Rs. 25/- per ISIN within Ambit Capital 0.02% of value Pledge Invocation     minimum Rs. 25/- per ISIN outside Ambit Capital Failed instruction charges    Nil Other Charges    Rs. 25/- per ISIN within Ambit Capital 0.02% of value

ANAND RATHI SHARE AND STOCK BROKERS LIMITED - COMMODITIES DP ID : 10607 Address : 4TH FLR,SILVER METROPOLIS BLD JAI COACH COMPOUND, WE HIGHWAY OPP.BIMBISAR NAGAR,GOREGOAN E MUMBAI 400065 MAHARASHTRA INDIA Tel No: 022 40013732, Fax No : 022 40013738 Email ID : dp@rathi.com

About Us AnandRathi (AR) Services Trade Online, Equity & Derivatives, Mutual Funds, Depository Services, Commodities, Insurance, IPOs. Tariffs Statutory Charges at the time of Account Opening    NIL Advance / Deposit    430 Account Maintenance    299 Demat    NIL Remat    A flat rate of Rs 100/- Transaction (Debit)    Purchase:-Free Sale : minimum Rs 25 per transaction. Maximum Rs 32 subject to 0.01% of the market value. Pledge Creation    0.01% subject to minimum of Rs 100 Pledge Creation confirmation    0.01% subject to minimum of Rs 100 Pledge Closure    0.01% subject to minimum of Rs 100 Pledge Closure confirmation    0.01% subject to minimum of Rs 100 Pledge Invocation    0.01% subject to minimum of Rs 100 Failed instruction charges    NIL Other Charges    Warehouse Services/ Holding Charges: The client shall be debited warehouse service/ holding charges and any other charges on actual as passed by Multi Commodity Exchange (Like NCDEX) Remarks All charges mentioned above are exclusive of CDSL, NCDEX & Warehouse receipt charges which would be recovered at actual

ANDHRA BANK DP ID : 40800 Address : DEPOSITORY SERVICES 6-3-352/2 & 3, ASTRAL HEIGHTS ROAD NO.1, BANJARA HILLS HYDERABAD 500034 ANDHRA PRADESH INDIA Tel No: 040 23421170,040 23421171 Fax No : 040-23358324 Email ID : abdp@andhrabank.co.in; u vijji@gmail.com

About Us Bank commenced offering Depository Services on 2nd January, 2006 Services All kinds of depository services apart from traditional banking and other Tariffs Statutory Charges at the time of Account Opening    Rs.100/- towards Stamp duty in the state of AP and actuals as applicable from State to State Advance / Deposit     Account Maintenance    Rs.300+applicable service tax Demat    Rs.2/- per certoficate + mailing charges as applicable +applicable service tax Remat    Rs.15/- for every 100 securities or part thereof or a flat fee of Rs.15/- per certificate whichever is higher and mailing charges +applicable service tax Transaction (Debit)    0.04% of market value (per transaction)with a minimum of Rs.20/- + applicable service tax Pledge Creation    Rs.50/- per transaction+ applicable service tax Pledge Creation confirmation    Rs.50/- per transaction+ applicable service tax Pledge Closure    Rs.50/- per transaction+ applicable service tax Pledge Closure confirmation    Rs.50/- per transaction+ applicable service tax Pledge Invocation    Rs.50/- per transaction+ applicable service tax

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before that you should know what are these fess
Depending on the DP, there may or may not be an opening account fee. Private banks, such as HDFC Bank and UTI Bank, do not have one. However, players such as ICICI Bank, Globe Capital, Karvy Consultants and the State Bank of India to do so. But most players levy this when you re-open a demat account, though the Stock Holding Corporation offers a lifetime account opening fee, which allows you to hold on to your demat account over a long period. This fee is refundable.

Annual maintenance fee

This is also known as folio maintenance charges, and is generally levied in advance.

Custodian fee

This fee is charged monthly and depends on the number of securities (international securities identification numbers — ISIN) held in the account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository.

Transaction fee

The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank and ICICI Bank peg the fee to the transaction value, subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs.

In addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa. This fee varies for both demat and remat requests. For demat, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee.

For instance, Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per certificate as the variable fee. However, SBI charges only the variable fee, which is Rs 3 per certificate. Remat requests also have charges akin to that of demat. However, variable charges for remat are generally higher than demat. Some of the additional features (usually offered by banks) are as follows.Some DPs offer a frequent trader account, where they charge frequent traders at lower rates than the standard charges.Demat account holders are generally required to pay the DP an advance fee for each account which will be adjusted against the various service charges. The account holder needs to raise the balance when it falls below a certain amount prescribed by the DP. However, if you also hold a savings account with the DP you can provide a debit authorisation to the DP for paying this charge.Finally, once you choose your DP, it will be prudent to keep all your accounts with that DP, so that tracking your capital gains liability is easier. This is because, for calculating capital gains tax, the period of holding will be determined by the DP and different DPs follow different methods. For instance, ICICI Bank uses the first in first out (FIFO) method to compute the period of holding. The proof of the cost of acquisition will be the contract note. The computation of capital gains is done account-wise.

Opening an account

Steps involved in opening a demat account First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 1, 2006.

All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalised the cost structure for dematerialisation by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 9, 2005 advised that with effect from January 9, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership