A Basic Service Demat Account or a BSDA Account is a distinctive Demat account that SEBI (Securities Exchange Board of India) launched in 2012. Focusing on the small investor with a cap on maximal holdings, a BSDA account can only be opened if your holdings add up to a maximum of Rs. 2 lakhs. If you have different portfolios over depositories, amounting to Rs. 2 lakhs each, you cannot open a BSDA account. If your holdings are valued at above the maximum amount of Rs. 2 lakhs, a normal Demat account, and not a BSDA Demat Account will apply to you.

Features and Benefits of a BSDA Account

A Basic Service Demat Accountholds many benefits that are part of its unique features, catering to the small-time investor. Some key ones are mentioned here:

• Curbs Burdens - Meant for small investors who are not major players in the regular trading markets, a BSDA cuts costs of opening and running a Demat account. Moreover, as this is an account for a small portfolio and trading is at a minimum, transaction fees may be nil or lower than those you would pay for a regular Demat account for larger portfolios.
• Sole/First-Name Holders - You must be a sole BSDA account holder or a first-name holder to have this account.
• Charges Vary - Depending on the broker you choose, either a finance company like Motilal Oswal, or any other, you can avail Demat account opening online. Charges for accounts vary from broker to broker for BSDA accounts and these are kept low to suit small investors.

Eligibility Criteria for BSDA Accounts

When you are clear about BSDA Demat Account meaning, you can consider the eligibility criteria, outlined by SEBI, that you must fulfil to open one. These are listed below:

• Ideally, investors should be the sole owners of the account.
• Only a single BSDA Demat Account can be opened by one investor.
• Investors cannot hold a regular Demat account and a BSDA Demat Account.
• At any point in the investor’s transaction history, the BSDA Demat Account should not contain more than Rs. 2 lakhs worth of holdings. If the amount exceeds Rs. 2 lakhs, it ceases to be a BSDA Demat Account.

Other Aspects to Know

While charges on a BSDA  Account are kept low, they do exist. You should now about these:

• Physical statements of paper mailed to customers incur very low charges.
• No Demat transaction charges are levied.
• Charges for annual maintenance of accounts is less than regular Demat Account charges which amount to Rs. 600-800.

Final Say

For small investors who are sure of not increasing their portfolios, BSDA Demat Accounts are a boon. However, your investment may tend to grow and it's a good idea to open a Demat Account with nominal charges like the one from ace broker Motilal Oswal.

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