January 01, 2026
5 mins read
It is quite relevant that you may have asked what are AMC charges? Account Maintenance Charges (AMC) for a Demat account are yearly fees that keep the account active and updated. The amount may vary depending on the depository participant (DP), the account type, and the firm’s policies. Some brokers waive the fee for a short time, while others use fixed or flexible pricing that stays the same each year. Besides the answer to your question - what is AMC charges, you must know the other aspects as well.
India has two depositories: National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). However, a Demat account cannot be opened with them directly. Every user must open it through a depository participant, and most brokers take up this role. In return, they charge AMC and a few other routine fees that help in handling electronic securities smoothly.
Account Maintenance Charges (AMC) are annual fees paid to keep a Demat account active and properly maintained. Charged by brokers acting as depository participants, AMC varies by account type, holdings, usage, and services offered. The content explains AMC meaning, types, fee structures, related Demat charges, factors affecting costs, ways to reduce fees, and dematerialisation and rematerialisation charges to help investors manage expenses wisely.
Account Maintenance Charges (AMC) are yearly fees paid to keep a Demat account active. The fee supports the basic maintenance of electronic holdings and the services associated with them. Each broker decides its own fee structure, and the amount may differ based on the type of account. Some brokers use a fixed rate, while others use a flexible model that adjusts with the account.
In simple terms, the demat account AMC works like a routine cost that helps the depository system run without issues. It stays quietly in the background but ensures every security in digital form remains recorded, updated, and easy to access throughout the year.
Regular Demat Account: This type of Demat account is commonly opened by individual investors for everyday stock market trading and long-term investments, offering standard features, basic services, and comparatively lower annual maintenance charges.
Partnership Firms Demat Account: Demat accounts for partnership firms are structured according to the firm’s trading activity and compliance needs, with annual maintenance charges that may vary based on transaction volume and specific broker policies.
HUF & Individual Entity Demat Account: HUF and certain individual entity Demat accounts may attract different AMC structures depending on ownership format, regulatory requirements, and the level of trading or investment activity undertaken through the account.
NRI Demat Account: NRI Demat account charges depend on whether the account is repatriable or non-repatriable, with additional compliance, banking linkages, and service requirements often influencing overall maintenance and operational costs.
Corporate Demat Account: Corporate Demat accounts are opened by LLPs, private limited companies, or public firms and usually involve higher AMC due to complex compliance, multiple authorized signatories, and higher-value transactions.
AMC & Fee Variation: Annual Maintenance Charges and related fees differ across brokers based on account category, service features, transaction frequency, and support offerings, making it important for investors to compare costs before opening a Demat account.
Fixed Annual Fee: Some brokers follow a single yearly demat account AMC. It keeps the account active and covers basic services. Many users find this structure simple and predictable.
Tier-Based Fee: A few brokers tie demat account AMC fees to account type. Higher-value accounts may have a slightly higher charge, while basic accounts stay lower.
Value-Linked Fee: In some cases, the demat account AMC fee changes based on the number of holdings. This keeps the cost aligned with how much the account is used.
Limited-Period Waiver: New accounts may get a short waiver period. It offers some relief during the early setup stage.
Knowing about the demat account AMC is an advantage. However, there are a few more standard costs associated with having a Demat account. These appear in parts, with each serving its intention to keep the account operational.
Account Opening Fees: Typically, a Demat account will have a single charge for opening the account. The amount varies by DP, with opening amounts in the neighbourhood of a range, though some companies offer discounted or free accounts as part of a short-term promotion. This fee covers the basic setup of the account. It also supports the first link between the user, the DP, and the depository.
Custodian Fees: Depositories act as custodians and hold securities in electronic form. Custodian fees cover this safekeeping process. They support record-keeping, corporate action updates, and smooth settlements. These charges remain in the background, but remain an important part of the packaging.
Transaction Charges: Every securities transaction incurs a small charge. This charge applies when you purchase, sell or transfer any securities. The charge varies by event and may occur more frequently when you are an active user. Still, it remains a standard part of Demat account use and helps maintain the flow of trades.
Pick an Account That Fits Your Usage: A simple trading style may require a basic-service account. It keeps routine demat account AMC lower and avoids unnecessary charges.
Keep One Active Demat Account: Holding several accounts often brings repeated yearly charges. Closing inactive accounts helps cut fixed costs and keeps things easier to manage.
Review Your Transaction Pattern: Every trade has a cost. Fewer and planned transactions reduce frequent deductions.
Check the Broker’s Fee List Regularly: Small charges appear for services like statements or pledging. A quick review now and then helps avoid extra costs and keeps the account efficient.
Holding Value: If your portfolio holds a larger value, your demat account AMC may be higher. Some brokers link fees to the total amount stored in your account.
Transaction Activity: Frequent transactions can lead to higher fees. Some brokers may apply fixed charges per transaction or factor in trading volume.
Delivery Type: Charges might vary based on how you receive shares. Accounts with more delivery-based trades could attract higher AM .
Value-Added Services: Full-service brokers often include extra services like research tools, SIP features, or margin support. If your account includes these, it might come with a higher AMC.
Dematerialisation is the process of converting physical securities into their electronic form. Rematerialisation, meanwhile, is the process of converting electronic securities into their physical form. When you opt to dematerialise or rematerialise securities, depository participants levy a nominal fee plus GST per certificate. These charges are dependent on the depository participant and can range anywhere from ₹10 to ₹60 per certificate.
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Brokers charge AMC for demat accounts to cover operational and administrative costs for maintaining the account, ensuring efficient management and record-keeping of securities in electronic form.
To avoid AMC charges, choose brokers with zero AMC plans, promotional offers, or negotiate based on your account value and transactions. Some may waive or reduce demat account maintenance charges under certain conditions.
The cost of opening a demat account ranges from ₹499 to ₹999, depending on the DP. Some brokers offer free or discounted demat account opening charges during promotions.
AMC charges for a demat account are usually annual but can be quarterly. This helps manage the financial burden of demat account maintenance charges on account holders
Yes, apart from AMC, Demat accounts may attract transaction charges, custodian fees, and dematerialisation/rematerialisation charges. These are levied based on the type and volume of transactions. Charges vary by broker and are usually disclosed in the pricing policy of the depository participant.
Most brokers disclose charges upfront, but users should watch for hidden fees like statement charges, conversion fees, or late payment penalties. It’s advisable to read the account's terms carefully to avoid surprises and choose brokers with transparent fee structures and clearly listed service charges.
No, there is no requirement to maintain a minimum balance in a Demat account, unlike savings accounts. However, maintaining sufficient funds in the linked bank account may be needed to settle purchase transactions or pay charges such as AMC and other applicable service fees.
If AMC is unpaid, the account may incur penalties or become frozen, restricting further transactions. The broker may also deduct the dues from the linked bank account or proceeds from securities. Continuous non-payment may eventually lead to account closure by the depository participant.
Yes, if a Demat account remains inactive for an extended period or AMC remains unpaid, it may be marked as dormant or closed. Reactivation typically requires submitting a reactivation request and updated KYC documents. Inactive accounts can't be used for buying or selling securities.
No, filing an ITR is not mandatory to open or maintain a Demat account. However, for high-value transactions or if income from capital gains exceeds the basic exemption limit, filing ITR becomes necessary. It’s recommended for active traders and investors to file returns regularly.
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