A demat account is essential if you want take delivery of shares. In case you are only going to be trading in Futures and Options then demat account is not required. But in case you intend to hold shares then you do need a demat account. In fact, if you open an equity trading account with a broker and trade in shares, it is mandatory to open a demat account too. Remember you also need a demat account if you want to invest in Initial Public Offerings (IPOs)…
Fallacy of free-demat accounts in the market place…
Today if you open any newspaper, you are deluged with advertisements about free demat accounts. More often than not, such ads can be misleading. Let us understand why! When you talk of demat account there are a variety of cost involved. Firstly, there is the account opening charge. Secondly, there is the power of attorney charge to execute the DIS. Thirdly there are annual maintenance charges (AMC) that is debited to your bank account every year. Fourthly, there are charges debited to your account each time there is a debit to your demat account on a per-transaction basis. Finally, there are hidden charges like in case you ask for a physical demat holding statement or if you ask for a physical statement of transactions.
CashCow – Free Demat account is actually free…
At the CashCow, the free demat account is actually free in the strict sense of the term. Above all, the CashCow demat account is also transparent about the manner in which it is free. Let us understand some key points here:
- There is no account opening charges in CashCow Demat account. Most of the brokers do offer a waiver on the account opening charges but if you open demat account with a bank, then the account opening charge automatically gets debited to your account. These charges can range from Rs.300-Rs.600 in different cases. At CashCow it is actually Zero.
- Every DP will charge you annual maintenance charges (AMC) on an annual basis. These charges could range from Rs.400 to Rs.800 and is usually inversely proportional to the number of transactions in your Demat account. At CashCow, there is no AMC that is billed to you. CashCow transparently states that there will be no AMC charged to you on an annual basis.
- Debits to the DP account are something that is charged by the principal depository; which could be the NSDL or the CDSL in the Indian context. Such charges will be transmitted to you, as is the norm.
- There are some special charges that may be billed from time to time to your account on actuals! However, these are likely to be very marginal in nature.
In a nutshell, CashCow forfeits the two major costs that you incur on your Demat account viz. Account Opening Charge and the Annual Maintenance Charge (AMC). That makes demat model of CashCow very reasonable, cheaper than a Basic Demat account and also very transparent!
CashCow is available for free download on Google Play and the entire software has been kept very light and simple so as to facilitate easy download and also easy navigating even for first time users.