Basic Service Demat Account (BSDA)

A Basic Service Demat Account allows investors to hold equity shares, bonds, mutual funds, and ETFs in electronic format, similar to a regular Demat account
OPEN ACCOUNT
Basic Service Demat Account (BSDA)
OPEN ACCOUNT
3 mins
14 November 2024

What is a Basic Service Demat Account (BSDA)?

A Basic Service Demat Account (BSDA), often referred to as a BSDA account, is a simplified and cost-effective option for individuals who wish to hold and manage their securities in an electronic form. Demat accounts are essential for trading and investing in the Indian stock market, allowing investors to hold stocks, bonds, mutual funds, and other securities in a digital format, eliminating the need for physical certificates.

Features of a Basic Service Demat Account

While a BSDA offers similar functionalities as a regular Demat account, it includes specific features catering to low-frequency investors:

  • Quarterly transaction statements: BSDA holders receive transaction statements every three months, outlining all account activities. In the absence of any transaction, no statement is provided. These statements are available in electronic format at no cost, while physical copies beyond two per year cost Rs. 25 each.
  • Annual holding statement: An annual statement of holdings is also provided, sent via email or postal address as per the investor’s preference.
  • SMS alerts: Registered mobile users receive real-time SMS alerts for transactions made through their BSDA.
  • Delivery instruction slips: Upon opening a BSDA, two delivery instruction slips are issued to the account holder for easy transaction management.

Pro tip

Invest in equities, F&O, and upcoming IPOs effortlessly by opening a Demat account online. Enjoy a free subscription for the first year with Bajaj Broking.

demat

Benefits of BSDA

BSDA accounts offer numerous benefits that appeal particularly to retail investors:

1. Cost-effective

One of the primary advantages of a BSDA account is its cost-effectiveness. For small investors, BSDA accounts are a boon as they come with reduced charges. The Securities and Exchange Board of India (SEBI) has mandated that no annual maintenance charges be levied if the value of holdings in the BSDA does not exceed a certain limit.

2. Low maintenance

BSDA accounts are designed to cater to the needs of retail investors with a smaller portfolio. The maintenance charges for such accounts are lower, ensuring that investors are not burdened by unnecessary fees.

3. Convenience

BSDA accounts eliminate the hassle of handling physical share certificates, making the process of buying, selling, and transferring securities smoother and more convenient.

Eligibility criteria for BSDA

  • The investor must have only one BSDA across all depositories and must not have any other Demat account.
  • To be eligible for a BSDA account, an investor's securities holdings should not exceed a certain threshold value, as specified by SEBI. This threshold ensures that BSDA accounts cater to retail investors with limited holdings.

Charges levied on BSDA

The BSDA charges vary according to the portfolio size:

Value of securities in BSDA account

Annual maintenance charges

Not exceeding Rs. 50,000

No charges

Rs. 50,001 to Rs. 2,00,000

Rs. 100 + GST

Above Rs. 2,00,000

Standard Demat charges


However, do note that these figures might have changed, so it's important to check with the depository participant for the latest charges.

For example, if an investor's BSDA account holds securities worth Rs. 40,000, no annual maintenance charges will be levied. If the holdings are worth up to Rs. 2,00,000, the depository participant will be allowed to charge a maximum annual fee of Rs. 100 + GST.

Converting to a BSDA account

Converting a regular Demat account to a BSDA account is a relatively straightforward process. Here's how it can be done:

  • Eligibility check: First, assess whether your portfolio's value meets the eligibility criteria for a BSDA account. If your holdings fall within the specified limits, you can proceed.
  • Contact your Depository Participant (DP): Get in touch with your DP, the entity that manages your Demat account. They will guide you through the conversion process.
  • Documentation: Provide the necessary documents and information as requested by your DP. This may include a request letter, a declaration, and details of your existing Demat account.
  • Conversion request: Submit a formal request to your DP to convert your regular Demat account to a BSDA account.
  • Confirmation: Once your request is processed and approved, your Demat account will be converted to a BSDA account. You should receive a confirmation from your DP.

Can a full-service Demat account be transformed into a BSDA account?

Yes, a regular Demat account can be converted into a BSDA, subject to SEBI’s review and approval of the investor’s eligibility. However, certain conditions apply: investors must hold no other Demat accounts, and any holdings exceeding Rs. 2,00,000 post-conversion or the opening of another Demat account will result in automatic reclassification back to a full-service Demat account.

SEBI regulations for BSDA accounts

SEBI has outlined specific fee structures and holding limits for BDSA accounts to benefit small investors:

  • Holding under Rs. 50,000: No annual maintenance charges are applied.
  • Holding between Rs. 50,001 and Rs. 2,00,000: Annual charges are capped at Rs. 100.
  • Holding above Rs. 2,00,000: The account is subject to regular Demat account charges.

By opting for a BSDA, investors with modest holdings can significantly reduce their annual fees while retaining the benefits of a Demat account for low-volume trading.

Conclusion

In conclusion, a Basic Service Demat Account (BSDA) offers an affordable and simplified way for small investors to hold and manage their securities electronically. With reduced charges, convenient maintenance, and straightforward eligibility criteria, BSDA accounts are a valuable option for those looking to navigate the world of investments with a smaller portfolio. Always ensure you are aware of the latest regulations and charges before making any decisions regarding your Demat account.

Related Articles

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Standard Disclaimer

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

Research Disclaimer

Broking services offered by Bajaj Financial Securities Limited (BFSL) | Registered Office: Bajaj Auto Limited Complex , Mumbai –Pune Road Akurdi Pune 411035 | Corporate Office: Bajaj Financial Securities Ltd,1st Floor, Mantri IT Park, Tower B, Unit No 9 & 10, Viman Nagar, Pune, Maharashtra 411014| CIN: U67120PN2010PLC136026| SEBI Registration No.: INZ000218931 | BSE Cash/F&O (Member ID: 6706) | DP registration No : IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN – 163403|

Research Services are offered by Bajaj Financial Securities Limited (BFSL) as Research Analyst under SEBI Regn: INH000010043. Kindly refer to www.bajajfinservsecurities.in for detailed disclaimer and risk factors

This content is for educational purpose only.

Details of Compliance Officer: Ms. Kanti Pal (For Broking/DP/Research)|Email: compliance_sec@bajajfinserv.in/Compliance_dp@bajajfinserv.in |Contact No.: 020-4857 4486 |

Investment in the securities involves risks, investor should consult his own advisors/consultant to determine the merits and risks of investment.

Frequently asked questions

What are the types of Demat accounts?

The main types of Demat accounts are Regular Demat Accounts, Repatriable Demat Accounts, Non-Repatriable Demat Accounts, and Basic Service Demat Accounts (BSDA).

What is the difference between a BSDA and a non-BSDA account?

A Basic Services Demat Account (BSDA) is designed for smaller investors with reduced maintenance charges, applicable only if holdings do not exceed Rs. 2 lakh. In contrast, a regular (non-BSDA) Demat account has no such holding limit and usually incurs higher maintenance fees. From 1st September 2024, the eligibility for BSDA will change, allowing holdings up to Rs. 10 lakh for the account to qualify as a BSDA.

What are the benefits of a BSDA account?

The benefits of a BSDA account include:

  • Fee caps on annual maintenance charges.
  • Cost-effective for small investors.
  • No charges if the value of holdings is below a specified limit.
  • Access to the advantages of a Demat account with reduced costs.
How can I convert my Demat account to BSDA?

To convert your existing Demat account to a BSDA, submit a request with your depository participant, ensuring that your holdings fall within the BSDA eligibility criteria.

How do I know if my account is a BSDA account?

You can confirm your account type by contacting your depository participant or checking your account status in the periodic statements provided by your broker.

Show More Show Less