Basic Services Demat Account (BSDA)

When you enter the stock market, the first thing you need is a Demat account. Enrol  in a stock brokerage firm to  open Demat account for free.. SEBI introduced the BSDA in 2012 to reduce the burden of Demat charges for small investors. The account encourages investors’ in equity markets by offering no or reduced charges. It is a low-fee Demat account for investors who don’t invest in stocks, bonds, gold ETFs, and IPOs on a regular basis. 

Understanding the Basic Service Demat Account

A BSDA is made for rookie investors who lack the capital to purchase securities. Opening and operating the BSDA are less expensive. According to SEBI, most people with Demat accounts don’t use them as regularly as they should. Not using the Demat account regularly does not reduce its maintenance cost. You are only allowed to have one Demat account. If not, the BSDA must be your sole Demat account across all depositories, according to one criterion for the BSDA.

  • According to the rule, all DPs should offer BSDA to increase financial inclusion. To help retail investors, DPs can lower the AMC for smooth processing. Other charges, such as folio charges for withdrawals and DRF charges, would continue to apply in the case of BSDA accounts. The cut-off value for the BSDA is determined by adding the value of all the holdings in a Demat account, including stocks, mutual funds, and ETFs.
  • If holdings in the BSDA exceed Rs 2 lakh on any given day, the DP may charge fees applicable to non-BSDA accounts from that day forward.If the value of the holding exceeds a predetermined limit at any time, the depository may charge the entire amount as normal accounts beginning on that date.
  • If holdings in the BSDA surpass Rs2 lakh on any given day, the DP can charge fees applicable for normal accounts (non-BSDA) from that day. If the value of holding crosses a prescribed limit on any period, the depository can charge the entire amount as normal accounts from that date.

The key components of the BSDA

Everyone with a Demat account in which they are a single holder is eligible to have a BSDA unless the value of the securities in the Demat account exceeds Rupees two lakhs. There can only be one BSDA in a person’s name in all depositories.

  • AMC structure for BSDA may be on a flat basis; if the value of the holding is up to Rs. 50,000, there will be NIL AMC. For the value of the holding between  Rs. 50,001 and  Rs. 200,000, maintenance charges will be up to Rs. 100.
  • The DPs must base their assessment of the holding’s value on the NAV, or daily closing price, of the securities or mutual fund units. The DPs may impose fees on the ordinary accounts if the value of holdings in a BSDA exceeds the specified requirements at any time.
  • At the conclusion of each quarter, transaction statements must be sent to the BO. No activity statement may be sent for a quarter in which there were no transactions. For accounts with no transactions and no balance, a physical holding statement must be sent annually to the BO’s indicated address. 
  • Free delivery of electronic statements is guaranteed. When it comes to physical statements, the DP must give away two statements for free each billing cycle. A cost of not more than Rs. 25 may be applied to each additional physical statement.
  • Such BOs shall get one physical statement of holdings from the DPs each year. The DPs will resume delivering the transaction statement each time an account transaction occurs.
  • As  long as the balance is zero, no transaction statement may be sent for such accounts. However, the BO must get an annual holdings statement.
  • One statement of holding for the whole year must be given to the BO for accounts that have a credit balance but no transactions throughout the year.

Eligibility Criteria to open a Demat account for free with BSDA

Retail investors can get a limited set of services at a lower price with a BSDA. In other words, a no-frills Demat account like the BSDA. Anyone can open a Demat account for free, even if it is a BSDA account. If the requirements are met, even Demat accounts that already exist can be converted to basic BSDA accounts. Things to keep in mind are:

  • The investor must be a single holder in order to qualify for the BSDA facility. For joint accounts, BSDA is not allowed. 
  • A person is only allowed to have one BSDA account across all DPS. The reason behind allowing only one BSDA is to prevent shareholdings from being split to bypass the value criteria. 


An investor with two Demat accounts has to close one to use  the facilities of the BSDA. In simple terms, if a Demat account registered under your name has an amount less than Rs. 2 lakhs, the account will convert into a BSDA accountThis account is open to anyone who is infrequently investing. . It is designed for smaller investors who are not eager to invest in stocks. The account requires less capital than the ordinary Demat account. Additionally, it reduces the load of investors with portfolios under Rs. 2,000,000. It has a significant advantage of low charges compared to traditional Demat accounts.

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