Financial Awareness Level
What Is the Account Maintenance Charge (AMC) for a Demat Account?
Introduction
When you open a Demat account to hold shares and securities electronically, you're often required to pay an Account Maintenance Charge (AMC). This is a fee charged annually by the Depository Participant (DP) for maintaining your Demat account. In this blog, we explain what AMC charges are, how they work, what they cover, and how to find zero AMC Demat account options in India.
What Is AMC in a Demat Account?
AMC, or Annual Maintenance Charge, is a yearly fee that the broker or Depository Participant charges to keep your Demat account active. It covers the cost of maintaining your account with the central depositories —NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited).
Why Is AMC Charged?
Although a Demat account is electronic, it requires backend infrastructure, technology platforms, regulatory compliance, and customer support to function smoothly. AMC is levied to manage these services.
Average AMC Charges for Demat Accounts in India
AMC charges vary depending on the broker and type of Demat account:
| Broker Type | Annual AMC Charges (Approximate) |
|---|---|
| Full-Service Brokers | ₹300 to ₹750 per year+ GST |
| Discount Brokers | ₹0 to ₹300 per year+ GST |
| Zero AMC Accounts | First-year free or lifetime free offers |
Note: Some brokers waive AMC for the first year or offer lifetime free AMC for basic accounts with limited services. (It may vary, so we kindly recommend you to seek advice from financial advisor before you take any/refrain from any action)
Zero AMC Demat Account – Is It Really Free?
Some brokers offer zero AMC charges to attract new users. These accounts are often subject to conditions:
- Free AMC for the first year only
- Zero AMC for accounts with low or no holdings
- Charges apply after a fixed transaction volume or time period
Always read the terms and conditions before opting for a no AMC Demat account.
How to Avoid or Reduce AMC Charges
- Choose Zero AMC Brokers: Look for brokers offering lifetime free AMC
- Opt for Basic Services Demat Account (BSDA): Available for investors with holdings under ₹2 lakh
- Consolidate Holdings: Maintain fewer accounts to reduce cumulative AMC
- Use Promotional Offers: Many brokers waive AMC for the first year as part of sign-up campaigns
What Is Included in Demat AMC Charges?
- Maintenance of account records
- Backend services provided by depositories
- Customer service and grievance redressal
- Annual statements and compliance
The option of investing in mutual fund schemes has been made even more accessible with the introduction of 3-in-1 accounts that provide the functions of Demat, savings, and trading account. However, opening a Demat account is also relatively easy and hassle-free.
You may also invest through an Demat + Trading Account
- You must log on to Demat+Trading Account
- You then select the mutual fund house from the list of fund houses
- Pick the mutual fund scheme based on your investment objectives and risk tolerance and click on Invest now
- You must select the amount you plan to invest in the mutual fund scheme and the mode as either One Time or Monthly SIP.
(Please note that it may vary as per brokers requirements, thereby you are recommended to seek advice from financial advisor before you take any/refrain from any action)
Conclusion
Demat Account AMC is a small yet important cost associated with holding securities electronically. While many brokers now offer free AMC Demat accounts, investors must understand the fine print. For those just starting or with limited investments, choosing a Basic Service Demat Account (BSDA) or zero AMC broker can significantly reduce long-term costs.
Additional links
AMFI - Introduction to Mutual Funds
FAQ Section
What is AMC in a Demat account?
AMC stands for Annual Maintenance Charge—an annual fee for maintaining your Demat account.
Is AMC compulsory for all Demat accounts?
Yes, unless waived under specific offers or if you qualify for a Basic Services Demat Account (BSDA). (You are recommended to seek advice from financial advisor before you take any/refrain from any action)
Can I get a Demat account with zero AMC?
Yes. Several brokers offer zero AMC accounts either permanently or for the first year. (You are recommended to seek advice from financial advisor before you take any/refrain from any action)
How much AMC do full-service brokers charge?
Typically ₹300 to ₹750 per year.
What is a Basic Services Demat Account (BSDA)?
It is a low-cost Demat account for investors with holdings below ₹2 lakh. AMC is minimal or nil.
Are AMC charges same across all brokers?
No. AMC varies by broker type, services, and offers.
How is AMC deducted?
Either from your linked bank account or from your Demat ledger depending on your broker.
Do mutual fund schemes investors need to pay AMC in Demat?
Yes, if mutual funds are held in the Demat account. But for non-Demat mutual funds, AMC is not applicable. (We kindly recommend you to seek advice from financial advisor before you take any/refrain from any action)
Is there AMC on dormant or inactive accounts?
Yes, AMC may still be charged even if you don’t trade actively.
How do I check if my account has AMC?
Log in to your broker platform or contact their support to check your account fee structure.
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An Investor Education And Awareness Initiative
Visit https://www.hdfcfund.com/information/key-know-how to know more about the process to complete a one-time Know Your Customer (KYC) requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which can be verified on the SEBI website (www.sebi.gov.in/intermediaries.html). For any queries, complaints & grievance redressal, investors may reach out to the AMCs and / or Investor Relations Officers. Additionally, investors may also lodge complaints directly with the AMCs. If they are not satisfied with the resolutions given by AMCs, they may raise complaint through the SCORES portal on https://scores.sebi.gov.in/scores-home/. SCORES portal facilitates investors to lodge complaint online with SEBI and subsequently view its status. In case the investor is not satisfied with the resolution of the complaints raised directly with the AMCs or through the SCORES portal, they may file any complaint on the Smart ODR on https://smartodr.in/login.
The information is for general purposes only and not an investment advice. Readers should seek professional advice before taking any investment related decisions.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY
