What is a Basic Service Demat Account

If you know what you're doing, stock market investment is a great way to make money. However, most people don't, and learning takes time and effort. Moreover, the market volatility often seems like a huge risk for a person new to stock market trading.

Still, nothing is impossible for a determined learner, and the first step to getting into stock market investing is to open a dematerialization account or a 'Demat' account. These accounts are where the 'dematerialized' or electronic versions of the stocks and other securities are stored after purchase. They are under the jurisdiction of the Security and Exchange Board of India (SEBI).

Since 2012, the SEBI has also offered investors the option of opening a basic service Demat account instead of a regular one if they don't want to or can't trade regularly.

Definition Of A Basic Service Demat Account

A basic service Demat account or BSDA is what it is named; a simpler and more basic version of a regular Demat account. It is designed for investors with smaller portfolios whose value does not exceed ₹ 2,00,000. It is also perfect for new investors who are still learning the ropes and do not want to take big risks. Thus, BDSAs are great for promoting financial inclusion.

Differences Between BDSAs And Regular Demat Accounts

There are many differences between BDSAs and regular Demat accounts, apart from the limit on the portfolio size. The biggest of these differences is in the cost of maintaining the accounts, also known as the annual maintenance charges or AMCs.

Regular Demat accounts are more expensive to maintain than BDSAs because the latter is free for portfolio values of less than ₹ 50,000. For portfolio values between ₹ 50,000 and ₹ 2,00,000, the AMC value for a BDSA is ₹ 100.

However, if your portfolio value were to exceed ₹ 2,00,000, your BDSA would automatically be converted into a regular Demat account. The actual calculation of daily closing prices to determine portfolio size is done by a Depository Participant or a DP. These values are calculated at the end of every trading day and compared to the limits of a BDSA account. If the value exceeds the limit, higher AMCs will apply.

The final important difference between a BDSA and a regular Demat account is that you can open only one BDSA across all DPs while having multiple Demat accounts.

How To Open Basic Services Demat Account?

Opening a basic service Demat account is easy as pie. All you have to do is talk to a bank official, who can then walk you through the process of how to open basic services Demat account. It is the same process you go through to open a regular Demat account at a bank, only you're asking for a BDSA.

Another option is to open such an account with a trading company. There you would even have financial advisors who can tell you which stocks to buy.

Demat and basic service Demat account opening is free at banks and trading companies, though AMCs apply. Additionally, services related to these accounts are often free for the first year at banks and trading companies, but charges apply based on transactions from the second year onwards.

Eligibility For Basic Service Demat Account Opening

There are certain eligibility criteria to open BDSAs. They are as follows:

Features Of A Basic Service Demat Account

Certain features of a BDSA make it different from regular Demat accounts, though all the features of a regular Demat are available with a BDSA. The BDSA-specific features are as follows:


To conclude, BDSAs are a much cheaper form of Demat accounts, which makes them easier to maintain. The cost-effectiveness makes BDSAs a big boon for small investors with small principals, who can participate in the stock market trading and make money without losing a large chunk of it in AMCs.

Additionally, investors new to stock trading can use BDSAs to learn the ropes before moving on into regular Demat accounts when they know enough to risk bigger principals. To know more about BDSAs and their features, you can also look at and download the circular issued by the SEBI.