How to Choose the Best Demat Account?

Holding shares in an electronic format requires a dematerialised (Demat) account and opening a demat and a trading account is the first step to invest in stock markets. A demat account can hold a number of instruments such as debt securities, government bonds, Exchange-Traded Funds (ETFs), mutual funds among others apart from a security.

Similar to a bank account, if you buy stocks of a company, the same will be credited in your demat account and if you place a sell order, stocks will be debited from your account. Demat accounts are three types: Regular demat account which is used by Indian residents, Repatriable demat account and Non-repatriable demat account.

Demat accounts are maintained by National Securities Depository Limited (NSDL) and Central Depositories Services Limited (CDSL). Stock broking firms in India are registered with either of the depositories.

Choosing best demat account

The foremost criterion for choosing a demat account is the ease of opening and operating it. The Deposit Participant(s), must therefore make the first step as convenient as possible. For instance, a demat account can be opened with any fuss via the e-KYC process, wherein the entire process is validated using the investor’s Aadhar data.

The e-KYC process, which helps investors open demat account online, eliminates the biggest headache for investors as it only requires them to do a final self- identification either through an in-person verification that is physical verification or through a video camera. But it must be noted that a trade must be carried out in less than two days of opening the account. In case the account is opened offline the trade must be conducted in less than five days.

Points to compare

  • There is an annual maintenance charge that the investors are required to pay every year.
  • A fee is charged on every debit from your demat account.
  • Your request for a physical copy of your demat holding or physical transaction copy is also chargeable.
  • You are required to pay if your Debit instruction Slip – DIS or Demat Request form – DRF is rejected.
  • Some DPs also charge for converting the share certificates from physical form to an electronic one.
  • In a BSDA account, if your account value is up to Rs 50k then there will be no amount levied for AMC and if the value of our holding falls between Rs 50,001 to Rs 2,00,000, the AMC fee will amount to Rs 100.
  • Some DPs also provide zero AMC demat accounts, wherein they waive the AMC charges.

Best demat account; interface between Broking and Banking

Another criteria of making a right choice of a demat account should be the interface between your broking and your banking account. Online trading requires a smooth trading app and a proper linkage of your bank account and your demat and trading account. Options such as 2-in-1 accounts or 3-in-1 accounts are available. The latter links your bank account, your demat account and your trading account and are offered by brokers who have group banking licenses. The 2-in-1 account allows money transfer and a link between the trading and demat account.

Data Analytics

DPs provide several online data analytics like real-time valuation, direct call to action requests for trading client, among others. These analyses are integrated with external factors which play a vital role in the performance of a share such as social and economic trends within the economy, all of which helps in decision making. Services like data analytics is an important criterion to choose the best demat account in India.


Several factors must be considered before you open a demat account online. The best demat account in India will be known for the quality of its services, security of transitions and very low customer complaints. Negative news about the company may be few and far between. Trading through the assistance of versatile Depository Participants is a secure method. IIFL provide an all-in-one account through which you can trade in multiple securities online from anywhere.

Open Demat Account at IIFL