If you just landed on this page searching for information about free online demat account, let us warn you there is no such thing in this world as free (as you may already know).
Even though some stock Brokers advertise about Zero Annual Maintenance Charges (AMC) demat account, the offer is usually for first year only and you will be charged second year onwards. And few other share brokers lure customer with zero demat account opening charges, but they make up for it through AMC charges or higher brokerage charges.
Also be informed that demat is not mandatory if one intends to trade in derivative (Futures and Options) only. In this case it is enough to open a trading account for which there will not be any AMC charges levied. But some sales representatives of even reputed brokers misguide the new investors to open demat account since their incentives are linked to it.
Free Demat Account is not all about saving few bucks
Off course you save few bucks for opting for free demat and trading account, keep in mind that the amount is peanut in comparison to the brokerage charges. Account opening charges are one time and AMC fee is paid once per year, but brokerage (commission) is paid for every transaction and hence you should pay attention to minimize it.
If you are a regular (or intends to be) , it is best to consider discount brokers whose brokerage charges are at rock bottom compared to Full service brokers. If you are new and does not know about the difference types of stock brokers in India, please read the article how to select the best share broker for yourself.
Just to give you an quick example, if you want to invest Rs1,00,000 through a broker who charge 0.5% brokerage, you will end up in paying Rs 500 as commission. On the other hand discount broker such as Zerodha and Upstox charges Rs0 irrespective of he invested amount.
Hence even though you save Rs 300 (Account opening charges of Zerodha) by opting for first broker who offer you zero demat account opening fees, you will loose much more in brokerage front. Now your fee goes up to Rs 5000 if you invest Rs 10,00,000 with first broker but remains Rs0 with Zerodha
But it is worthwhile to look at the below list of the brokers offering free online demat accounts with or without Zero Annual Maintenance Charges.
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Angel Broking is one of the premier stock broking firms of India and they are offering lifetime free demat account as part of their limited period promotional offer. It has more than two decades of existence to its credit with more than 10 lakh plus customer.
They are also offering SMS advisory services, again for limited period of time, which is actually a paid service from them. One can open the demat account freely through online within an hour if you have Aadhar card. Their trading platform Angel Eye is also one of the recommended trading platforms of India.
SAS Online is online venture of South Asian Stock Limited. They are one of the few brokers charging Zero towards both demat account opening and Annual Maintenance charges. Their brokerage rates are still less than Zerodha at Rs 9 and also have unlimited trading plat at Rs 999/month.
Sharekhan (Read detailed review of Sharekhan) is household name in India, thanks to their widespread advertisements in both print and visual media. You can find the Sharekhan branches in every major cities and towns of India. They are also opening demat account free of any opening charges.
You can also avail of attractive trading plans that suit your needs by just paying the AMC charges that are fully adjustable against brokerage . Their trading platform “Trade Tiger” is considered to be best suited for day trading.
ICICIDirect pioneered the online Investment culture in India. Their free 3-in-1 demat account can be opened online easily and there is no charges levied for it if you switch from your current broker to ICICIDirect. And the AMC charges are NIL for the first year.
Religare Securities Ltd. (RSL) is a wholly owned subsidiary of Religare Enterprises Limited. They are one of India’s leading stock broking companies since 1994 and Religare online is web portal of Religare Securities. Religare online has waived off their Rs 1000 demat account opening and Rs 350 AMC charges as limited period offer.
Edelweiss Broking is a part of Edelweiss Group which is one of India’s leading diversified financial services conglomerates providing a broad range of financial products and services to a substantial and diversified client base that includes corporations, institutions and individuals. They are offering Rs500 worth of Amazon gift voucher on account opening.
Read: Detailed review of Edelweiss Brokerage Charges
We started this article with few guidelines and ending with some more!. If you are a small investor with capital less than Rs 2 lakhs, then we advice not to worry about AMC Charges. As per the government guidelines, you account will be considered as Basic Service Demat Account (BSDA).
The advantage with BSDA account is, SEBI has fixed Rs 100 as AMC fees for account with Rs50,000–Rs 2,00,000 and NIL for demat accounts with total value of securities less than Rs50,000. Only if the value crosses Rs 2Lakh, Depository Participants (DP) can charge as per their slabs.
So consider all these aspects before opening any of the free demat account online. If you already have demat account and want to switch then read this article about procedure to transfer shares from one demat account to another.