Demat Account Maintenance Charges (AMC) look small at first—₹300, ₹500, sometimes ₹800 per year. But over time, they quietly reduce your returns, especially if you’re a long-term investor.
The good part is, under updated rules from the Securities and Exchange Board of India, there are now clear and practical ways to reduce or even eliminate AMC completely.
Let’s break it down in a simple, practical way.
What is AMC in a Demat Account?
AMC is a yearly fee charged by your broker or Depository Participant (DP) for:
- Maintaining your Demat account
- Holding your securities electronically
- Providing statements and services
It’s similar to a bank account maintenance fee.
1. Use BSDA (Best Option for Small Investors)
If your portfolio is not very large, this is the smartest move.
What is BSDA?
BSDA = Basic Services Demat Account
SEBI has updated limits to make it more useful.
AMC Structure (2026):
- Up to ₹4 lakh holdings → ₹0 AMC (FREE)
- ₹4 lakh to ₹10 lakh → Max ₹100 + GST
- Above ₹10 lakh → Normal AMC applies
Who can open BSDA?
- You must be the sole or first holder
- Only one BSDA account allowed across all depositories
What you should do:
If your portfolio is under ₹4 lakh: Ask your broker to convert your account to BSDA
This alone can make your AMC zero.
2. Choose Zero AMC Brokers
Many modern brokers have removed AMC completely.
Some examples:
- Flattrade → Zero AMC plans
- m.Stock → Lifetime free plans
- Dhan → One-time payment options
- Angel One → Offers AMC waivers or first-year free
Types of offers:
- Completely free AMC (lifetime)
- First year free, then charges apply
- One-time payment → lifetime free account
What to check:
- Hidden charges
- Account opening fees
- Other transaction charges
Don’t just look at “free”—check the full cost.
3. Consolidate Multiple Demat Accounts
Many people have:
- One account for IPOs
- One for trading
- One old unused account
Each one charges AMC separately.
What you should do:
- Transfer all shares into one account
- Close the extra accounts
You can use:
- CDSL Easiest portal (for easy transfer)
This step alone can save hundreds every year.
4. Use Broker Waiver Conditions
Some full-service brokers don’t remove AMC directly but give waivers.
Examples:
- ICICI Direct
- HDFC Sky
How waivers work:
- Maintain a premium bank account
- Generate minimum brokerage
- Meet yearly activity requirements
If you meet conditions → AMC is refunded or waived
5. Don’t Keep Empty Demat Accounts
This is a common mistake.
Even if:
- Your account has zero shares
- You’re not using it
AMC may still be charged
Why this is risky:
- Charges accumulate
- Account goes into negative balance
- In some cases, it may affect your credit profile
What you should do:
If not using an account for 6+ months: Close it properly
6. Choose the Right Plan from the Start
When opening a new Demat account, compare:
- AMC charges
- Brokerage fees
- Hidden costs
- Technology/platform quality
Sometimes a slightly higher opening fee saves you lifetime AMC.
Quick Strategy Based on Your Portfolio
If your holdings are under ₹4 lakh:
Convert to BSDA immediately (zero AMC)
If your holdings are ₹4–10 lakh:
Stay in BSDA (very low AMC)
If your holdings are above ₹10 lakh:
Move to a zero AMC or lifetime free broker
If you have multiple accounts:
Consolidate and close extras
Common Mistakes to Avoid
- Ignoring AMC because it “looks small”
- Keeping unused Demat accounts open
- Not checking broker pricing structure
- Falling for “free” plans with hidden charges
Final Thoughts
AMC is not a huge cost in one year, but over 10–15 years, it quietly eats into your wealth. The smart move is to eliminate it early.
With options like BSDA, zero AMC brokers, and account consolidation, there’s no real reason to keep paying unnecessary maintenance charges anymore.
A little cleanup today can save you money every year going forward.
