Different Types of Demat Account

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What is a Demat Account?

A Demat account is a type of repository for your shareholdings, primarily used to electronically hold shares, bonds, securities, ETFs, etc. It eliminates the hassles of owning and storing a physical copy of investments. The Securities and Exchanges Board of India (SEBI) mandates stock market investors to have a Demat account to invest. Indirect investments, such as purchasing a mutual fund, can be done without a Demat account; however, no direct investments can be made without it. Different types of Demat accounts are available in the market, and investors can select their preferred account according to their requirements.

The Types of Demat Accounts

Let us look at the types of Demat accounts.

  1. Regular Demat account:

    Indian residents can open regular Demat accounts. It carries out the basic activities of a Demat account, i.e., holding the investments in a Dematerialized electronic format. The account holders can use a regular Demat account for their investment activities in equity shares. A trading account and a regular Demat account are required to carry out investments in Futures and Options. A regular Demat account comes with annual maintenance charges (AMC). The SEBI introduced a Basic Services Demat Account (BSDA) that eliminates or minimizes the AMC depending upon the investment size. This feature was introduced to help small-time investors who pay high AMC despite minimal holdings. BSDA was introduced to induce more participation from smaller investors.
  2. Repatriable Demat Account:

    These accounts are designed specifically for NRI (Non-resident Indian) investors. It allows them to invest in the Indian stock markets and facilitates the transfer of funds outside India. Repatriable Demat account holders require NRE (non-resident external) accounts to be linked to the Demat accounts. It then allows for a maximum repatriation of up to one million US dollars annually.
  3. Non-repatriable Demat account:

    The non-repatriable account is also designed for NRIs. However, it does not allow for transferring funds outside India. The non-repatriable accounts are linked to an NRO (Non-resident ordinary) Demat account.

What are the Documents Required for Opening All Types of Demat Accounts?

To open any type of Demat account in India, you will need to provide specific documents. These typically include a PAN card, Aadhaar card, and a selfie or video verification. Additionally, you'll need proof of address (such as a utility bill, bank statement, or rental agreement) and proof of identity (such as a voter ID, passport, or driver's license). For NRIs, an overseas address proof and a copy of their passport are required. It's essential to have these documents ready to ensure a smooth and efficient account opening process.

How to Choose the Right Type of Demat Account?

Choosing the right type of Demat account depends on your investment needs and residency status. If you're a resident Indian, a regular Demat account will suffice. For NRIs, an NRI Demat account is necessary. If you plan to trade frequently, consider opting for a 2-in-1 or 3-in-1 account, which integrates trading and banking services for seamless transactions. Additionally, evaluate the brokerage fees, customer service, and features offered by different stockbrokers to make an informed decision. Selecting the right Demat account can enhance your trading experience and meet your specific financial goals.


A Demat account is a type of savings account that contains your securities instead of money. Investing in Indian stock markets requires a Demat Account, and the investors have the option to select from different types of Demat accounts. Residents of India can opt for a Regular Demat account which is relatively simple to procure from any Depository Participant. On the other hand, NRI investors have to comply with the rules of the Foreign Exchange Management Act (FEMA) and can hold a Repatriable or Non-Repatriable Demat account, depending upon their requirements.


1. What is a BSDA account?

A BSDA (Basic Services Demat Account) is a type of Demat account designed for small investors to minimize their costs. It offers reduced annual maintenance charges (AMC) compared to regular Demat accounts. BSDA accounts are suitable for investors with holdings of less than ₹2 lakh in value. The BSDA account aims to encourage more participation in the securities market by providing a cost-effective solution for investors with lower transaction volumes.

2. What is the major benefit of having a regular Demat account?

The major benefit of having a regular Demat account is the ability to hold and manage securities electronically. This eliminates the need for physical share certificates, reducing the risk of theft, loss, or damage. Additionally, it simplifies the process of buying, selling, and transferring securities, making transactions faster and more efficient. Regular Demat accounts also provide easy access to account statements and transaction history, aiding in better portfolio management.

3. Are repatriable and non-repatriable accounts similar?

Repatriable and non-repatriable accounts serve different purposes for NRIs. Repatriable accounts allow the transfer of funds (including the principal and earnings) back to the NRI's country of residence. In contrast, non-repatriable accounts do not permit the transfer of funds abroad, and the money must be used within India. Both account types can hold securities, but the key difference lies in the ability to move funds across borders.

4. Is a Demat account mandatory?

Yes, a Demat account is mandatory for anyone who wishes to trade in the Indian stock market. It is essential for holding and transacting in the share market, including shares, bonds, and mutual funds. Having a Demat account ensures that all transactions are conducted in a secure and efficient manner, complying with regulatory requirements. It also simplifies the process of tracking and managing investments.

5. What is a 3-in-1 Demat Account?

A 3-in-1 Demat account integrates three essential financial services into one account: a savings account, a trading account, and a Demat account. This setup simplifies the process of trading by seamlessly linking the banking, trading, and depository functions. With a 3-in-1 account, investors can transfer funds from their bank account to their trading account and settle transactions directly, providing a streamlined and convenient trading experience.

6. What are the charges associated with Demat Accounts?

Demat accounts typically incur several charges, including account opening fees, annual maintenance charges (AMC), transaction fees for buying and selling securities, and custodian fees. Additional charges may apply for dematerialization and rematerialization of securities, as well as for account statements and other services. It's important to review the fee structure of the depository participant before opening a Demat account to understand the cost implications.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Can I open multiple demat accounts?

Answer Field

Yes, you can open multiple demat accounts but only under the below conditions:

  • You can open only one demat account per DP using the same PAN card.
  • You can open multiple demat accounts with different DPs using the same PAN card.

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