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What is the Process for Converting your Demat Account into a BSDA Account

If you have a bank account and wish to open a Demat account, it's easy to do so and you may not have to pay any charges for starting one. Several banks and finance companies like Motilal Oswal offer Demat accounts in which to hold your stocks and other assets. However, certain charges associated with a Demat account may put you off starting one. A way to avoid much of the cost of a Demat account is to open a BSDA account. 

  • What is BSDA Account

A unique type of Demat account was introduced by the Securities and Exchange board of India (SEBI) in 2012. This is called a BSDA or Basic Services Demat Account. It requires you to invest much less than you would in a regular Demat account, serving the purpose of small investors who may be vigorous investors. Furthermore, it reduces the monetary burden on investors who wish to hold a Demat account with relatively small portfolios, with limits of Rs. 2 lakhs and under. 

  • Benefits of a BSDA 

Finance companies like Motilal Oswal offer you Demat and trading accounts with low fees and charges. You can easily open an online trading account. However, if you wish to cut your expenses all the more, then a BSDA Demat Account is a good option. Here are benefits you should know about before knowing how to convert to one: 

  1. Charges that you have to pay for physical statements are less than those charged for regular Demat accounts. 
  2. You do not have to pay regular charges that Demat account holders have to, on transactions and opening of accounts, running costs, etc.
  3. Annual charges, if any, are low. 
  • How to Convert Demat Account to BSDA

In the event you are paying heavy DP charges on your regular Demat account, you may want to switch to a Basic Service Demat Account to mitigate expenses. You can request your DP to change the status of your account and this happens under certain conditions. Below, you can find some pointers on how to tackle this:

  1. You should be the sole or first holder of any Demat account.
  2. You should not be holding another BSDA account - you are permitted only one.
  3. Your holdings should be less than or up to Rs. 2 lakhs.
  4. A way to mitigate costs is to hold a BSDA account by transferring some of your. holdings into a joint BSDA account with someone (who is a first holder) so you can save on costs. This may be a relative you trust to have financial holdings with. 

Concluding Lines

If you trade heavily, then you may end up paying bulky fees and charges per transaction when you trade. At Motilal Oswal, you will find nominal fees levied for brokerage and regular Demat account charges. 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account


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