Minimum Balance In Demat Account | Can You Have Zero Balance? (2024)

If you are looking to invest your money in the share market, then you must be aware that you need a demat account to begin your journey. Now a lot of people often think that investing in the share market requires a lot of capital. And this further leads them to worry and think about the minimum balance in demat account.

But is there any requirement of maintaining a balance in Demat account. Does it make any sense?

Well! let’s have a look at the detail.

Minimum Balance Required For Demat Account

Now when investing in the stock market, one needs two types of account, trading account and Demat account. In the former account, you need to maintain funds to buy and sell securities, while in the latter you can secure your shares and holdings.

Since, one can buy 1 share or multiple shares thus there is no specific limit or minimum balance to be maintained in the demat account.

Along with this, the stockbroker does not ask you to maintain a minimum balance in the trading account. However, if you open a 3 in 1 demat account with the bank based stockbroker, then yes it is important to meet the criteria of maintaining a minimum balance in the saving bank account.

In the table, given below are the minimum charges you need to maintain in your demat account.

Here it is important to note that since all your transactions happen through your trading account, you need to maintain some balance in that account.

Wondering why?

It is because the stockbrokers charge you with account maintenance charges, also known as AMC. These are either charges monthly or yearly. You have to maintain that particular amount in your trading account. Failing to do so can often lead to some additional penalty or a deduction in amount as soon as you transfer money to the trading account.

But again this also depends on the stockbroker you choose as there are brokers offering lifetime free demat account by offering you the relaxation from paying the AMC.

How Much Minimum Amount Required to Open A Demat Account?

Now, it is clear that you don’t have to maintain a minimum amount in order to have a demat account. But are there any minimum charges that you require to open a demat account? The answer is YES!

With some stockbrokers you might have to pay some amount in order to activate your Demat account.

Earlier every stockbroker used to charge some opening fees but lately, the trend has changed. Now the stockbrokers usually open a demat account for free,to be an active part of the ongoing competition.

A large number of discount stockbrokers in India do not charge any opening fees from their clients. For example,Angel Oneand 5paisa.But apart from these, there are some discount brokers likeZerodhathat charge you an account opening fee.

Apart from this, now a lot offull-service stockbrokershave also moved in the direction of free demat account opening likeMotilal Oswal.

Joining this league, now a lot of bank-based stockbrokers have also started providing free demat account opening to its clients. This includes big names likeKotak Securitiesand alsoHDFC Securities.

Therefore, it has become more convenient for people now to start their stock market journey.

Conclusion

Your demat account is a storehouse for your shares, which were earlier stored in physical format. There are a lot of benefits of a demat account,and one of them includes maintaining no minimum balance. But you need to maintain at least some amount in your trading account so that you can easily pay your account maintenance charges. Also, there is no such minimum limit on the number of shares that you keep in your Demat account as well.

So, your stock market journey can be in ease when you open a demat account!

Frequently Asked Questions

1. Can demat account have zero balance?

Yes, you can have a zero balance on your demat account. This is majorly due to the fact that you only need to store your shares in your demat account. All your transactions and money related things happen through your trading account.

2. Is it mandatory to maintain demat account minimum balance?

No, you do not have to maintain any minimum balance in your demat account. However, if you do not trade for a year, your demat account can become dormant. You will have to renue your account again if you want to start trading after this.