What is Account Maintenance Charges (AMC) in Demat Account?
Account Maintenance Charges (AMC) refers to the charges levied by a Depository Participant (DP) for maintaining the Demat account. It is mandatory to pay the fee. AMC charges are recurring in nature. Usually, the investors have to pay it annually or quarterly.
Every DP or broker levies the AMC for Demat accounts on its customers. However, they vary from one broker to the other. It is essential to check the AMC charges before opening a Demat account with a broker.
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Understand AMC Charges for a Demat account
The Account Maintenance Charge (AMC) is the fee levied by a Depository Participant (DP) to maintain the Demat account. The fee is charged to recover the expenses incurred by the stockbroker to operate the electronic account.
All the DPs or stockbrokers levy AMC charges for their services. Before opening a Demat account, you must be aware of these costs. Investors have to pay the AMC charges every year. They must make the due payment at the start of each fiscal year.
AMC Charges of Top Stock Broker
Top Brokers Account Maintenance Charges
| Sr. No | Stock Broker | Active Client | Account Opening Fees | AMC Charges |
|---|---|---|---|---|
| 1 | ICICIdirect | 1,875,350 | Free | 700 |
| 2 | Groww | 7,092,413 | 0 | 0 |
| 3 | Zerodha | 6,598,363 | 300 | 300 |
| 4 | Angel One | 5,098,124 | 0 | 240 |
| 5 | Upstox | 2,237,974 | 0 | 0 |
| 6 | Kotak Securities | 1,055,717 | 0 | 600 |
| 7 | HDFC Securities | 1,016,329 | 0 | 0 |
| 8 | Motilal Oswal | 807,786 | 0 | 199 |
| 9 | SBI Securities | 757,635 | 850 | 0 |
| 10 | Paytm Money | 740,285 | 0 | 0 |
| 11 | Sharekhan | 624,891 | 0 | 0 |
| 12 | 5paisa | 495,066 | 0 | 300 |
| 13 | IIFL Securities | 413,244 | 0 | 250 |
| 14 | Dhan | 310,070 | 0 | 0 |
Types of AMC Charges for a Demat Account
A Demat account provides a variety of facilities, and the investor has to pay for all of them. The following are the types of Demat account charges.
1. Demat Account Opening Charges
Some brokers charge a certain amount for opening a Demat account. It is the charge an investor needs to pay to open a Demat account. The broker levies it for the cost incurred in the account opening procedure.
2. Charges for Dematerialisation
Dematerialisation allows investors to hold paper security certificates in an electronic format. The broker charges a fee for converting the shares. While some brokers charge a fixed price per certificate, others levy a fee based on the assets’ value.
3. Demat Account Custodian Fees/Safety Charges
This charge depends on the number of investments held in the Demat account. Many DPs pay the one-time fees to the depository as custodian fees.
4. Demat Account Transaction Charge
These changes are applied when the investor buys or sells a security. The DP charges a certain amount of fee on each transaction. Some DPs levy a fixed fee, while others charge it based on the trading volume.
5. Share Pledging Charges
Investors may pledge the equity shares present in their Demat account as collateral for margin trading. The broker charges a pledge creation fee each time an investor pledges the shares in his Demat account.
6. Demat Account Maintenance fee
The DP levies an account maintenance fee for maintaining your Demat account. It usually includes the costs for offering services like consolidated account statements (CAS), record keeping, etc. It is usually charged annually.
Top Brokers Brokerage Charges and Fees
| Sr. No. | Stock Broker | Equity Delivery Trading | Equity Intraday Trading | Commodity Options Trading | Equity Futures Trading | Equity Options Trading | Currency Futures Trading | Currency Options Trading |
|---|---|---|---|---|---|---|---|---|
| 1 | ICICIdirect | 0.55% | 0.05% | 20 | 0.05% | 95 | 20 | 20 |
| 2 | Groww | 0.05% | 0.05% | NA | 20 | 20 | NA | NA |
| 3 | Zerodha | 0 | 0.03% | 20 | 0.03% | 20 | 0.03% | 20 |
| 4 | Angel One | 0 | 0.03% | 20 | 0.25% | 20 | 0.25% | 20 |
| 5 | Upstox | 2.50% | 0.05% | 20 | 0.05% | 20 | 0.05% | 20 |
| 6 | Kotak Securities | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 7 | HDFC Securities | 0.15% | 0.02% | 10 | 0.03% | 100 | 12 | 10 |
| 8 | Motilal Oswal | 0.20% | 0.02% | 200 | 0.02% | 20 | 20 | 20 |
| 9 | SBI Securities | 0.50% | 0.05% | NA | 0.05% | 100 | 0.03% | 30 |
| 10 | Paytm Money | 20 | 0.05% | NA | 0.02% | 10 | NA | NA |
| 11 | Sharekhan | 0.30% | 0.02% | 20 | 0.02% | 20 | 0.02% | 5 |
| 12 | 5paisa | 20 | 20 | 10 | 20 | 20 | 20 | 10 |
| 13 | IIFL Securities | 0 | 20 | 20 | 20 | 20 | 20 | 20 |
| 14 | Dhan | 0 | 0.03% | 10 | 0.03% | 20 | 0.03% | 20 |
Conclusion
As you may understand now, you will have to pay the AMC regardless of your DP, but it is always up to your decision to choose the one with whom you can discuss and implement your investment strategies. You can go for a DP that charges many charges for AMC but provides a good facility, or you can choose one that charges fewer AMC but suits your requirements and investment goals the most.
Compare all the brokers and make your decision. But always remember to choose wisely and not take your decision rashly if you do not wish to complain later.
Frequently Asked Questions (FAQs)
Your Demat account provider may make your Demat account inactive if you don’t pay the account maintenance charges on time.
It entirely depends on your depository participant. It could be more or less dependent on what type of DP you have chosen.
It gets charged every quarter or every three months from the opening date of your Demat account. Or it can also depend on your DP.
Consider creating a brokerage account with platforms that provide no AMC plans or fee waivers for a set period of time if you want to avoid paying AMC costs. Some brokers may forgo AMC costs if you maintain a certain account balance or execute a certain number of transactions each month.
To offset the costs of administering and maintaining your trading account, brokers charge AMCs (Annual Maintenance Charges). These fees go towards maintaining the platform and providing necessary services, customer care, and account management all year round.