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Navigating the World of Demat Accounts: Which Type Is Right for You?

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As the world of investing continues to evolve, dematerialized (demat) accounts have become a popular option for holding securities in electronic form. However, with more than one type of free online demat account available in the market, it can be challenging to determine which one is best suited for your investment needs. In this article, we’ll explore the various types of demat accounts and help you navigate the world of demat accounts to find the right type for you.

Types of Demat Accounts

The world of demat accounts is divided into 3 major categories. Here is a detailed view of the 3 types of demat accounts.

  • Basic Service Demat Account (BSDA)

A BSDA account is a demat account that allows you to make small investments in the market. 

If you have an investment of less than Rs 2 lakh, you are eligible to open a Basic Services Demat Account (BSDA). However, if your investment exceeds Rs 2 lakh, your BSDA account will automatically convert to a Full-Service Demat Account (FSDA). 

It’s important to note that for BSDA active investing is not required. Additionally, only one BSDA account is permitted per person, so you can’t open multiple accounts under the scheme to exceed the investment limit.

  • Regular Demat Account

Regular demat accounts are among the most common types of demat accounts held by investors across the nation. These accounts are provided by an online stock broking platform or banks, and they offer a simple and easy way for people to invest in the stock market and manage their investments digitally. 

The key features of a regular demat account include quick transfer of shares and the ability to make various types of investments. Moreover, while regular demat accounts are not typically free, they are generally affordable and offer competitive pricing. Some online stock broking platforms also offer a free demat account. However, you should research well before making a decision. 

  • Corporate Demat Account

If you’re looking to invest under your organisation’s name, you’ll need to open a corporate demat account. This account type requires you to provide all the necessary documents for the company and its owners, including Aadhar cards, company proofs, and address proofs.

Opening a corporate demat account can have significant benefits, as it can help with the financial planning of the company and offer opportunities to gain profits. However, it’s essential to note that this type of account can only be used if you own a company or companies.

How to Choose the Correct Account for Yourself?

Here are the points to consider before choosing the correct demat account.

  • If you are a common investor seeking to make online investments, you can consider opening a regular demat account that allows you regular investments in the market.
  • If you want to make small investments lifelong and do not want to be an active investor, a BSDA account will best suit you where you can invest with little capital in the market. 
  • Lastly, if you own any kind of private or corporate firm and want to invest under its name, opening a corporate demat account becomes necessary.


In conclusion, choosing the right demat account is essential for successful investing in the stock market. By understanding the different types of demat accounts available, you can make informed decisions based on your investment needs and goals.


SMEStreet Edit Desk

SMEStreet Edit Desk is a small group of excited and motivated journalists and editors who are committed to building MSME ecosystem through valuable information and knowledge spread.

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