What is the Account Maintenance Charges (AMC) in Demat Account?

Today, with the advent of digitalisation, shares no longer need to be a tangible asset. They are dematerialized, making it much easier for everyone to buy and sell them.

The Dematerialisation process is when physical shares’ certificates are converted to electronic form. This makes it easier to keep track of your shares and access them irrespective of your physical location. These shares are then stored in a Demat account, also known as a Dematerialised Account. It holds the shares and securities that you have invested in through an online or electronic platform.

If you engage in online trading of securities, the purchased securities are kept in a Demat account making it easier for users to trade the securities. The Demat account holds the investments that you make across the various asset classes.

Types of Demat account Charges

There are four distinct types of Demat account charges that you will come across:

Types of Demat Account Charges

1.Demat Account Opening Charges

Before the normalised use of Demat accounts, a bank would charge Rs. 700 to Rs. 900 as opening charges. Now, however, Demat accounts require a negligible opening charge by the depository participant. Some banks have special offers to open these kinds of accounts as it makes it easy for investors that are starting to invest in the stock market.

2.Demat Account Custodian Fee or Safety Charges

Depository participants need to pay safety charges as a one-time fee and most do not opt for a fee from the investor to maintain the account. Those who do charge a custodian fee may have one every month and the charges vary based on the number of securities linked to the Demat account. The charges can be as little as Rs. 1 for each International Securities Identification Number.

3. Demat Account Transaction Charges

The transactions that take place within the Demat account are done so with the end goal of making a profit for the investor. The depository participant may charge a fee for their service for the transactions that help earn you money. Every time a security moves in or out of the Demat account, a transaction fee is paid to the DP.

However, some may opt to do this every month. Much like custodian fees, the transaction fee can differ based on the type of transaction that is taking place. When you buy shares, the Demat account is credited and when you sell shares, it is debited. Hence, some DPs may charge a fee only when shares are debited from the account, while others may do it for both incoming and outgoing shares.

4. Demat Account Maintenance Charges

Unlike some other charges which can be waived, a Demat account holder will need to pay an annual maintenance charge or AMC to the depository participant for the services that have been provided. These are also known as folio maintenance charges and can range from Rs. 300 to Rs. 900 a year.

Banks that offer three-in-one accounts for Demat, trading and saving, tend to charge a lower AMC since the accounts are linked. However, if the Demat account is mapped to a savings account from another bank, the AMC charges could be higher.


With the advent of the dematerialisation process, the fear of stocks and investment papers being lost, stolen, or damaged is no longer a point of concern. Instead, everything can be taken care of through the click of a few buttons or by asking your Depository Participant to follow a few instructions from the comfort of your home.