If you have a Basic Services Demat Account (BSDA) then this news may be useful for you. The Securities and Exchange Board of India (SEBI) has changed the rules of Basic Service Demat Account.
The limit for BSDA has been announced to be increased from Rs 2 lakh to Rs 10 lakh. This rule will come into effect from September 1, 2024. On Wednesday, SEBI conducted a comprehensive review of the eligibility criteria of BSDA, which aims to promote the participation and investment of new investors in the stock market.
Eligibility for BSDA and BSDA
This facility was introduced by market regulator Sebi in 2012 to reduce the burden of demat charges on investors with small portfolios. On eligibility for BSDA, Sebi said a person is eligible for BSDA provided he/she satisfies certain criteria such as the investor has only one demat account as the sole or first holder, has only one BSDA in his/her name across all depositories and the value of securities in the account does not exceed Rs 10 lakh at any point of time for both debt and non-debt securities combined.
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To be eligible for BSDA, your account should be in the name of only one person. You should not have any other demat account. Additionally, only one demat account can be held under the BSDA category. If you have a joint account, you will not be the first holder of the account.
Value of certificates in BSDA
If you have a BSDA, the total value of certificates you hold should not exceed Rs 10 lakh at any point of time. This is applicable after September 1, 2024 and is applicable for both debt and non-debt securities. Let’s say you bought certificates worth Rs 9.50 lakh, which later became worth Rs 10.30 lakh. Since the value of the certificates has increased, normal brokerage charges will apply and your account will not be considered as a BSDA as per SEBI regulations.
Demat Account Charges
Sebi said the annual maintenance charge for BDSA will be zero for portfolio value up to Rs 4 lakh and for portfolio values above Rs 4 lakh and up to Rs 10 lakh, the charge will be Rs 100. However, if the portfolio value exceeds Rs 10 lakh, the BDSA should be automatically converted into a regular demat account. With regard to services for BDSA, the regulator said electronic statements will be provided free of cost to such account holders. In addition, a charge of Rs 25 per statement may be levied for physical statements.
