If you are an investor in the share market, you probably heard about the demat account. Demat account is the short name of the dematerialized account that allows one to sell and buy shares.
When you sell or buy the shares through a broker, the shares are sold or transferred from your demat account in T+2 days. Demat accounts are regulated by central depository services limited and national services depository limited.
There are four types of demat accounts, basic service demat account, regular demat account, non-repatriable demat account, and repatriable demat account. But people are confused about choosing the right type of demat account.
Here in this article, we derive all the essential information of demat account basic services online.
What is basic services demat account?
A basic service demat account ( BSDA) is a particular demat account that SEBI introduced in 2012 only for eligible Indian citizens. Introducing this special demat account type aims to encourage small investors, even if they have little or no knowledge of stocks, ETFs, and mutual funds, to enter the trading market.
A BSDA account offers the same benefits as a regular demat account but has different maintenance charges.
Eligibility criteria to open the basic service demat account?
Even though the basic services demat account offers exceptional cost efficiency, still the investors are required to meet the eligibility criteria to open their BSDA account.
- The investor has to open their account in some capacity
- The investors should be first-time demat account holders
- The investor should only keep the one basic services demat account
- The collateral amount in the demat account should not be over the 2lakh per annum
- If the investor has any joint demat account, they are not considered the primary account holder.
Is it possible to turn the full-service demat account into a BSDA account
Turning your complete services demat account into the basic services online demat account is possible. Here the process of converting the full services demat account to the BSDA account works.
- The market regulator SEBI first verifies the status of the investor before start making any change
- The conversion of a full-service demat account to a basic service demat account is based upon approval by the market regulator, SEBI.
- However, before putting the request to turn the full services demat account into a BSDA account, you have to ensure that no other demat accounts are operated only by you.
- If you are managing more than one account, your application will be rejected.
- Even after converting your full-service demat account to a BSDA account, if your account holding values are more than 2lakh, your BSDA account is automatically turning into full services demat account.
If you decide to open your BSDA account either online or offline, it will be a proven effective decision. It provides a convenient account opening process and allows you to do seamless trading.