A demat account has one recurring cost that hits whether you trade or not: the Annual Maintenance Charge (AMC), typically ₹300-700 a year. What most small investors never learn is that SEBI created a no-frills account type — the Basic Services Demat Account (BSDA) — that charges ₹0 AMC on holdings up to ₹4 lakh. If your portfolio is modest and this is your only demat, you are very likely paying for a regular account you never needed.
What is a BSDA?
A Basic Services Demat Account is a regular demat account with a capped fee structure, introduced by SEBI to keep small investors in the market without AMC eating their returns. It holds shares, ETFs, bonds and mutual funds exactly like any other demat account — same depository (CDSL or NSDL), same ISIN holdings, same ability to receive IPO allotments and dividends. The only thing that changes is the maintenance fee, which is zero or near-zero as long as your holdings stay within the BSDA limits.
In June 2024, SEBI raised the BSDA ceiling fivefold — from ₹2 lakh to ₹10 lakh — effective 1 September 2024. That single change brought the majority of retail portfolios inside the zero or low-fee band.
BSDA charges 2026: the slab that saves you money
AMC is tiered to the value of securities held in the account, measured on the holding value at the time of billing:
| Holding value | Annual Maintenance Charge | Who this fits |
|---|---|---|
| Up to ₹4 lakh | ₹0 (NIL) | Most first-time and SIP-stage investors |
| ₹4 lakh – ₹10 lakh | ₹100 / year | Mid-size long-term portfolios |
| Above ₹10 lakh | Auto-converts to a regular demat (standard AMC applies) | Larger portfolios — BSDA no longer applies |
Compare that to a regular account: even a "discount" broker that advertises a low AMC still bills ₹300 + GST a year on most plans, and bank-led DPs run ₹500-750. Over a 10-year holding period the difference is a few thousand rupees of pure leakage — exactly the kind of buried, value-destroying charge we map in our full demat charges comparison.
Who is eligible for a BSDA?
BSDA eligibility is about how many demat accounts you hold, not just portfolio size. You qualify only if all of these are true:
- You hold only one demat account across all depositories (CDSL and NSDL combined) as the sole or first holder. You can be a second holder in other accounts — that does not disqualify you.
- The value of securities in that account is within the BSDA limit (₹10 lakh).
- You have opted for the account to be operated as a BSDA (or your DP has classified it as one).
If you have deliberately opened multiple demat accounts — a common move IPO applicants make — none of them can be a BSDA. That trade-off is worth weighing against the AMC saving; we cover the multi-account maths in can you have multiple demat accounts in India.
You may already qualify — and your DP should have switched you
Under the 2024 framework, SEBI directed depository participants to automatically classify eligible existing accounts as BSDA unless the holder opts out. In practice, many DPs have been slow or have kept investors on regular plans by default. The result: people who meet every condition are still being billed full AMC.
The fix is simple. Check your latest Consolidated Account Statement (CAS) or your DP tariff. If you are inside the limits, on a single account, and still seeing an AMC debit, raise a request with your broker to reclassify the account as BSDA. It is free to switch.
BSDA vs regular demat — what you actually give up
| Feature | BSDA | Regular demat |
|---|---|---|
| AMC (≤ ₹4 lakh) | ₹0 | ₹300-750 + GST |
| Holds shares / ETFs / bonds / MF | Yes | Yes |
| IPO application & allotment | Yes | Yes |
| Dividends & corporate actions | Yes | Yes |
| Electronic statement | Free | Free |
| Physical statement | First one free, then charged | Often free / per tariff |
| Holding value cap | ₹10 lakh (auto-exits above) | None |
| Number allowed | One (as sole/first holder) | Multiple |
For a buy-and-hold investor the only meaningful "loss" is the cap and the physical-statement nicety — neither matters if you bank online and hold under ₹10 lakh.
How to open or switch to a BSDA
Opening a new account: tell the broker at account opening that you want it operated as a BSDA. Discount brokers including Zerodha and others let you elect BSDA terms during onboarding or from account settings.
Converting an existing account: submit a written or e-signed request to your DP asking to reclassify the account as a BSDA. There is no fee, and your holdings, BO ID and history stay exactly as they are — only the tariff changes. If you instead want to leave a broker entirely, that is a different process; see how to close a demat account, but for a small single account, switching to BSDA is almost always the better move than closing.
Should you use a BSDA?
Yes, if: this is your only demat account, your holdings are under ₹10 lakh, and you are a long-term or SIP-stage investor who simply wants to stop the AMC bleed.
No, if: you run multiple demat accounts on purpose (for IPO applications or to separate strategies), your portfolio is already above ₹10 lakh, or you need a second account as first holder. In those cases the BSDA conditions cannot be met and a well-chosen regular account — see our best demat accounts comparison — is the right call.
For the millions of Indians holding a few mutual funds, a handful of shares and one ETF in a single account, BSDA is free money left on the table. Claiming it takes one request.
Frequently Asked Questions
What is the AMC on a Basic Services Demat Account (BSDA)?
A BSDA charges zero AMC when the value of securities held is up to ₹4 lakh, and ₹100 per year when holdings are between ₹4 lakh and ₹10 lakh. If the portfolio value crosses ₹10 lakh, the account is automatically converted into a regular demat account and standard AMC applies. SEBI raised the BSDA ceiling from ₹2 lakh to ₹10 lakh effective 1 September 2024.
Who is eligible for a BSDA?
You are eligible if you hold only one demat account across all depositories (CDSL and NSDL) as the sole or first holder, and the value of securities is within the ₹10 lakh BSDA limit. Being a second holder in other demat accounts does not disqualify you. If you deliberately maintain multiple demat accounts as first holder, none of them can be a BSDA.
Can I convert my existing demat account to a BSDA for free?
Yes. Submit a written or e-signed request to your depository participant to reclassify the account as a BSDA. There is no fee, and your holdings, BO ID and transaction history are unaffected — only the AMC tariff changes. SEBI also directed DPs to automatically classify eligible accounts as BSDA, so check whether you already qualify.
Is a BSDA different from a regular demat account in what it can hold?
No. A BSDA holds shares, ETFs, bonds and mutual funds exactly like a regular demat account, receives IPO allotments and dividends, and uses the same CDSL or NSDL depository. The only differences are the capped AMC, the ₹10 lakh holding limit, that you may hold only one as first holder, and that physical statements beyond the first are chargeable.
What happens to my BSDA if my holdings cross ₹10 lakh?
Once the value of securities in a BSDA crosses ₹10 lakh, it is automatically converted into a regular demat account and the standard AMC for that broker begins to apply. Your shares and account details remain unchanged — only the fee structure reverts to regular terms.
Sources: SEBI circular on revision of BSDA (June 2024, effective 1 September 2024); SEBI / CDSL / NSDL investor guidance. Figures current as of 2026; confirm your tariff with your depository participant before switching.