How you can cut costs of holding demat accounts

The annual maintenance charges of BDSA, introduced by market regulator Securities and Exchange Board of India (Sebi), is nil if the value of holding is up to ₹4 lakh. If it is more than ₹4 lakh, but less than ₹10 lakh, the annual charges are capped at ₹100. For more than ₹10 lakh, the brokers can levy regular AMC. If you have a delisted share, its value is pegged at zero.

However, to be eligible for BDSA, you must have only one demat account, where you are the sole or first holder.

The closure-cum-transfer facility offered by brokers allows you to consolidate your demat accounts. This facility is only allowed in cases of self-transfers. You first need to submit account closure forms to your respective brokers.

Mention the details of the target demat account; select the reason for closure as ‘consolidation of accounts’; and check the box that says balances in the account are to be ‘transferred to another account’.

You also have to submit a copy of the client master report (CMR) of the target demat account. The CMR copy is a digitally signed certificate issued by the brokers, which you can receive by making a simple request online.

Here are few other things to keep in mind. If the shares are transferred between joint accounts, the sequence of the primary and secondary account holders in all accounts (source and target) must be the same. For example, if Mr. A is the primary holder and Mr. B is the secondary holder of the existing demat account. To transfer shares to their new joint demat account, Mr. A must be the primary and Mr. B the secondary holder of the new account.

Securities can be transferred only within the same beneficiary owner (BO) status–they can be transferred only from an individual account to an individual account and not from an individual account to a joint account, NRI or HUF account.