Before telling which is the best Demat account, I will explain in simple term what is a Demat account. Before 2001, stock were kept in physical format which were know as shares certificate. Buying and selling physical shares were slow and cause lots of issue in settlement. So it was decided that stock would be kept in Digital format or DEMAT form so that they can be easily managed.
So DEMAT allows you to take delivery of shares in Digital format. So if you are planning to buy shares and keep it for more than a day, then you would require a Demat account. Most of the broker now provide purchase of Mutual funds also with a DEMAT account making it easier to manage the MF holding.
Demat account are only provided by CDSL and NSDL in India. Your broker become a Depository participant with either of these two and provide you the facility to take delivery. Both CDSL and NSDL don’t charge when you buy share but when you sell share, you are charged around Rs 13-Rs 15 per scrip. This is separate for your brokerage charge and is collected by your broker. You should be able to see these charges in the contract note.
Apart from this, there is a Annual Maintenance Charge (AMC) which is charged by the DP. The rates are decided by your broker and can vary from Rs 150 – Rs 500. Remember this charges directly goes to NSDL/CDSL to manage your account.
Understanding trading account
But you cannot trade if you don’t have a trading account with a broker. The stock broker will open a trading account for you where you can buy and sell share from the exchange. For providing this service, the broker charge a brokerage per trade. It varies across broker. Find out about the lowest brokerage charge broker in India.
So once you have opened both trading and Demat account, you can start to trade in stock market.
Coming to the list of best Demat account for Beginner in India
Zerodha – They are the first discount broker in India who started providing fixed brokerage per trade and disrupted the Indian markets. The charge Zero brokerage for delivery and .01% or Rs 20 whichever is lower for intraday and F&O. Zerodha is a DP with CDSL and use them for providing Demat account service.
Account opening charge is Rs 300 and Annual Maintainence charge is Rs 300 from second year onwards. Remember that though they have Account opening charges, they do not ask for a minimum margin check while opening the account.
Angel Broking – They are one of the best full service broker operating in India and have more than 1 million client. They have a DP account with NSDL and Angel charge a brokerage of .22% for delivery and .02% for intraday. They also charge Rs 14 when you sell the scrip.
Account opening is free of cost but they do ask for a minimum margin check of Rs 25,000 to open the account.
You can find all the details about the major stock brokers in India. But if you are a small investor, do look for lower brokerage as it could mean huge difference in return you can earn. Also, if you are just starting and want to have a advisor or RM helping you in trading, in that case you have to look for a full service broker even if you have a pay a little higher brokerage.
So if you are a small investor or just starting to trade, it is important to keep in mind the requirement you have from your broker. That would help you in long run.
You can find about all the major stock broker in India on top 10 stock broker.