There are several types of Demat account charges that an investor has to pay while using, as well as opening a Demat account. While some brokers offer free account opening other charges a fee for the same. Therefore, a thorough study before opening up a Demat account is very helpful. We for the past three years have been working with the below mentioned 3 Brokers.
Zerodha and Upstox are discount brokers whereas Angel Broking is a full broker that provides us advisory services as well. A person should have at least 2 Demat accounts if he/she is active in the securities market. Firstly an account with a full broker that will provide margins for intraday and short term trading. Secondly, an account with a discount broker to make long term investments as charges are 0.
Break Up of the 7 different types of Demat Account charges
The charges in a Demat account are of two types one is fixed and the other is recurring i.e on every order that a person places on an Exchange. Let us look at these charges.
- Fixed Demat Account Charges
- Account Opening fees
- Annual maintenance charge
- Recurring Demat Account Charges
- STT – Securities Transaction Tax
- ETC – Exchange Transaction Charges
- GST – Goods and Service Tax
- SEBI Charges
- Stamp Durty
- DP – Depository Participant Charges
Example of a pair of Trade to compare demat account charges
The fixed charges of all the discount brokers are close to 500 INR annually. For Zerodha it’s 300 INR + GST along with an account opening fee from the 1st year, for Upstox it’s 500 + GST and for Angel Broking, it’s 699 + GST from 2 nd year onwards. Consequently, if we look at overall fixed charges for 2 Years for all the 3 brokers they are almost equal.
|Broker||Account Opening||Annual Maintenance||2 Years analysis|
|Zerodha||200 Eq + 100 Commodity||300 + GST||900 + GST|
|Upstox||0 usually, sometimes they charge 50,100, |
upto 300 depends upon the offer they are running
|500 + GST||1000 + GST|
|Angel Broking||0||0 for 1st year 699 + GST from 2 year||699 + GST|
Now for the Recurring charges, almost all the three brokers are charging the same amount give or take plus-minus 5 Rs on a pair of orders. The charges can be seen in the images below.
Sita is a trader, she opens her demat account with a broker and now she tries to place an order. She buys 100 shares of SBIN (State Bank of India) at 430 INR and sells them at 450 INR. She gained 20 points in the trade. Ideally her profit should have been 20×100 = 2000 INR. Note all the charges mentioned are for single buy and sell order.
Case 1 – Delivery, Holding or Short Term Holding, Buying in Holding etc
If you pay the full price to buy a stock for a single day or many days in a row, it is known as delivery. The brokerage for delivery is 0 INR. The amount can vary only by 5 Rs because of the DP charges, that are charged from the broker’s side on the sale of delivery. Here is a sample contract note from Zerodha.
The total charges for Sita here are 114.06 INR and the Total profit is 1885.94 INR.
Case 2 Types of Charges in Intraday Trading
Firstly, the name is self-explanatory, If you buy and sell the stock on the same day, it is known as Intraday trading. Secondly, let us use the same example of Sita but this time she achieves this feat on the same day. Here in the contract note, you will see that the taxes are comparatively low and there is no DP charge.
The total charges for Sita here are 47.12 INR and the Total profit is 1952.88 INR.
Case 3 Types of Charges for Derivatives
There are two types of Derivatives one is Future and the other one is Option. The meaning of the word derivative is literal. A derivativeis derived from something for instance, Equity derivatives are derived from equitites. Similarly, commodity derivatives are derived from commodities. Let us take the same example of Sita for derivatives trading. Sita buys a SBIN 24 June 2021 contract trading at 430 whose lot size is 1500 shares and she sells it at a price of 450. Ideally, her profits should have been 20×1500 = 30000. Let us check the charges on this trade are as follow.
Total Charges for Sita here are – 160.57 Total Gain – 29839.43
Case 4 Option Trading Charges
Finally, last but not the least, we have charges in the options trading. Options are a traders delight. Considering, the same trade of SBIN Buy an option of strike price 430 CE July at a premium of 30 and sold it when the premium was 50. The lot size of SBIN is 1500 shares. Effectively gaining 20 points and a total profit of 20×1500 = 30000 INR.
Total Charges for Sita here are – 161.72 Total Gain – 29838.28