Different Types Of Demat Account

Indians have access to a number of financial and physical investment products. While real estate and gold are primary investment options for Indian households, financial products are catching up fast. Equity investments are gaining popularity in the country. The Central Depository Services Limited opened 38 lakh net demat accounts in 2019-20 as compared to 25 lakh in the previous financial year. In just two months of FY21, CDSL has opened over 11.5 lakh demat accounts. A surge in the number of new demat accounts signals towards an increase in equity investors. It is mandatory to have a demat account to invest in certain segments of the equity markets, which makes it important to know what is demat account

What is demat account?

A demat account is an account to store financial securities like shares in the dematerialised form. The full form of demat account is dematerialised account. The demat account is used to securely hold and trade shares in the demat form. There are two main depositories in India that provide demat account services—CDSL and NSDL. To cater to the varying needs of different customers, demat accounts are of various types.

Types of Demat Account

Regular demat account

A regular demat account is used by investors who reside in India. It is the best demat account for people who trade in shares only. Once you buy the shares of a company, it is stored in the digital format in the demat account. When the shares have to be sold, the shares are directly moved from the demat account. A regular demat account is not required to trade in the derivatives segment as they do not have to be held. The demat account is managed by the depositories but the opening and maintenance are handled by depository participants, popularly known as stockbrokers. A demat opening charge and maintenance charge is levied by the stockbrokers.

The Securities and Exchange Board introduced a new type of demat account to promote financial inclusion in the country, called the basic services demat account (BSDA). The basic services demat account is similar to a regular demat account with a slight difference in maintenance charges. The maintenance charges for basic services demat account is zero if the holding is less than Rs 50,000. If the holding is between Rs 50,000 and Rs 2 lakh, the charges are Rs 100 per annum. The basic services demat account is expected to lower the entry barrier for first-time investors.

Repatriable demat account

Along with people residing in India, non-resident Indians can also invest in the equity markets. However, NRIs cannot use a regular demat account to invest as repatriation of funds is not allowed from a regular demat account. A repatriable demat account allows the transfer of funds abroad but you need to have a Non-Resident External NRE bank account for it. If you become an NRI and you have equity investments in India, you will have to close the regular demat account and transfer the holdings to a Non-resident ordinary demat account.

Non-repatriable demat account

Just like a repatriable demat account, the non-repatriable account is meant for non-resident Indians with a slight difference. One can transfer wealth abroad through a repatriable demat account, but the transfer of funds is not allowed in the case of non-repatriable demat accounts. It is meant for NRI investors who want to utilise the funds within India.

The regular, repatriable and non-repatriable demat accounts are different types of accounts based on their functionalities. The best demat accounts can also be categorised on the basis of services offered. Based on allied services like trading account and bank account, demat accounts can be categorised into 2-in-1 accounts and 3-in-1 accounts.

  • A 2-in-1 account offers trading and demat accounts together. If you opt to open a demat account , the stockbroker will also offer to open a trading account simultaneously.
  • A 3-in-1 account offers a trading account, demat account and a bank account together. It is generally offered by the stockbroking units of banks.


A demat account is compulsory to apply for initial public offerings and to trade in equity shares. To choose the best demat accounts, opt for credible stock brokers. Open an IIFL Demat and Trading account to get access to quality research and tools. One neither has to pay account opening charges nor demat maintenance charges for a year with IIFL Demat and Trading charges.

Open Demat Account at IIFL