Money Basics · Stocks & demat

Opening a demat

Before you can buy a single share in India, you need two accounts: a demat account (holds your shares electronically) and a trading account (executes buy/sell orders). Most brokers combine both.

Why a demat?

Until the late 1990s, shares were physical paper certificates. Fake certificates were rampant. The National Securities Depository Limited (NSDL, established 1996) and Central Depository Services Limited (CDSL, established 1999) were created to dematerialise shares. Turn them into electronic records. Your demat account at NSDL or CDSL holds all your shares digitally.

> NSDL and CDSL are SEBI-regulated depositories. Your shares sit there in your own name rather than on your broker's books, which is exactly why a broker going bankrupt does not touch them.

The actual process

1. Choose a broker. Any SEBI-registered one; the categories and what separates them are below

2. Download the app or go to website → click 'Open Demat Account'

3. Enter mobile number → OTP verification

4. Enter PAN card number

5. Upload Aadhaar (for KYC via DigiLocker or manual upload)

6. Complete in-person verification (IPV). A 30-second selfie video

7. E-sign the account opening form via Aadhaar OTP

8. Done. Account is live in 24–48 hours.

₹0Typical demat opening fee at a discount broker, as of 2026

24–48 hoursTime to account activation

Annual maintenance charges (AMC)

Most brokers charge ₹300–₹700/year for maintaining your demat account, but SEBI's Basic Services Demat Account (BSDA) rules cap it for small portfolios. If you hold only one demat account against your PAN, AMC is NIL while your holdings stay at or below ₹4 lakh, and ₹100/year between ₹4 lakh and ₹10 lakh. Depositories categorise eligible accounts as BSDA automatically. Cross ₹10 lakh and the broker's full rate applies, every year, whether or not you trade, so it belongs in your cost comparison.

What actually differs between brokers

• Pricing model: discount brokers charge a flat fee per order, full-service brokers a percentage of trade value, which diverges sharply once trade sizes grow
• Whether mutual funds live in the same app or a separate one
• Depth of charting and order tools: worth paying for if you trade actively, dead weight if you buy and hold
• The AMC, and the conditions under which it's waived
• How readable their charge sheet is. SEBI requires the contract note to itemise every charge; a broker who makes that hard to find is telling you something.

Takeaway. A demat account is your digital vault for shares, held at NSDL or CDSL in your own name rather than by the broker. Opening one is a 24–48 hour job, and brokers differ mainly on pricing model, tooling depth and annual maintenance charge.