India Raises Demat Account Limits to Boost Investment Landscape

India will increase the basic service Demat account threshold from ₹2 lakh to ₹10 lakh starting September 1, 2024, to enhance the investment landscape. The BSDA aims to reduce holding costs and is suitable for small investors. SEBI's new guidelines involve changes in maintenance charges and account conversion rules.

India is set to enhance its investment landscape by increasing the threshold for the basic service Demat account (BSDA) from ₹2 lakh to ₹10 lakh, effective from September 1, 2024. This adjustment will allow investors to hold a larger value of securities in their BSDA.

Introduced by SEBI in 2012, the BSDA is designed to lower the cost of holding securities compared to a regular Demat account. Eligibility criteria for the BSDA include sole ownership of the account and not possessing any other Demat accounts. Only one BSDA can be held, and joint accounts are not eligible under this category.

As per SEBI’s new guidelines, if your portfolio is up to ₹4 lakh, no annual maintenance charge is required. For portfolios between ₹4 lakh and ₹10 lakh, a ₹100 charge applies. Portfolios exceeding ₹10 lakh will be converted to regular Demat accounts. These new rules aim to make investing in the Indian market more accessible and cost-effective.