4 Types of Demat Account
You can choose from four types of Demat accounts in India. Each serves a specific purpose and comes with different features and restrictions. We have listed all four below:
1. Regular Demat Account: A Regular Demat account is the most common type of account available for Indian residents. It allows you to hold unlimited securities in electronic form, including stocks, bonds, and mutual funds.
Depositories like NSDL and CDSL offer Regular Demat accounts through Depository Participants (DPs). You may be required to pay an Annual Maintenance Charge (AMC), which varies by Depository Participant (DP). Some DPs may also offer accounts without any AMC.
2. Basic service Demat Account (BSDA): A Basic Service Demat Account (BSDA) is a simplified version of the regular account, designed for infrequent investors. If the value of your holdings is ₹50,000 or less, there is no AMC.
If the value is between ₹50,001 and ₹2 lakhs, the AMC is capped at ₹100 annually. However, you can open only one BSDA per PAN, and it is ideal if you don’t trade frequently but still want to maintain a Demat account.
3. Repatriable Demat Account: A Repatriable Demat account is specifically for Non-Resident Indians (NRIs). To open this type of account, you must have a Non-Resident External (NRE) bank account.
The key benefit is that you can transfer funds abroad, allowing you to repatriate proceeds from the sale of securities up to $1 million annually. It is a preferred choice for NRIs who want to invest in Indian markets while having the option to move funds overseas.
4. Non-repatriable Demat Account: A Non-Repatriable Demat account is also for NRIs but comes with certain restrictions. You need a Non-Resident Ordinary (NRO) bank account to open this account.
Unlike the repatriable account, you cannot transfer funds abroad, but you can move funds within India to other domestic accounts. It is ideal for NRIs who wish to reinvest their earnings in India without moving funds overseas.
Documents Needed for All Demat Account Types
To open any type of demat account, specific documents are required. These help verify identity, address, and other essential details. Below is a list of documents commonly asked for during the account opening process.
1. Proof of Identity:
2. Proof of Address:
Aadhaar card
Utility bill (electricity, water, or gas – not older than 3 months)
Bank statement with recent transactions
Passport
3. Bank Proof:
4. Income Proof (for trading in derivatives):
Is a Demat account mandatory for Trading or Investing?
Many investors pause at this point because the rules seem unclear at first. A Demat account simply stores shares in a digital form, and most market actions now rely on this format. It works a bit like a digital locker that keeps all the security in one safe place. When shares are bought or sold, the settlement needs a home, and the Demat account fills that role. Without it, trades on the exchange cannot move forward.
Yet not everything in the market depends on it. Products like mutual funds work without a Demat account, which surprises many people. But once the focus shifts to listed shares, ETFs, or certain bonds, the account becomes part of the process. It keeps records neat and helps transactions flow without confusion.
How to Pick the Right Type of Demat Account?
Choosing the right Demat account can feel confusing at first, as many options appear similar. A simple way to narrow your choice is to understand your trading style, costs involved, and the overall ease of using the platform.
Identify whether you trade frequently or invest for the long term
Compare charges, as even small fees can add up over time
Check the platform’s ease of use for daily activities
Look for clear layouts, stable features, and smooth navigation
Choose an account that feels comfortable and suits your investing habits
This approach makes selecting the right Demat account much simpler and more practical.
Additional Read: How to Close Your Demat Account Online
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Bajaj Broking (BFSL) makes no recommendations to buy or sell securities.
