An account type called a demat account enables you to hold shares of firms electronically. To trade shares on the stock exchange, it is a prerequisite. If a demat account is not utilized for a predetermined amount of time, inactivity fees apply. Depository participant (DP) inactivity fees vary from one to the next, however they are normally in the range of Rs. 100 each year. You can prevent inactivity fees by maintaining your demat account in the following ways:
- Regularly access your demat account: By doing so, you’ll be able to demonstrate that you’re still using the account and keep it from expiring.
- Set up a trade: Even if you don’t wish to purchase any shares or sell any, which can help you in playing safe while going with your active account. It is done seeking the help of any single share based company in the market. Check What is demat account?
- Transfer shares: You can move shares you hold in your demat account to another demat account. Additionally, it will keep your account active.
- Maintain a minimal balance: Some DPs require you to keep your demat account active by maintaining a minimum balance.
- Paying the yearly maintenance fee: You must pay a fee known as the annual maintenance charge in order to keep your demat account open. Usually, this fee is roughly Rs. 100 each year. Check what is demat account?
Here are some more pointers for maintaining the activity of your demat account:
- Regularly review your account statements: You may find the time you last logged in on your account statements, along with any inactivity fees assessed. If you have any questions, get in touch with your DP:
- You can ask your DP for help if you’re unsure how to maintain your demat account active. You can keep your demat account active and prevent inactivity fees by adhering to these suggestions. The following are some dangers connected to inactive demat accounts:
- Loss of bonus shares and dividends: You risk missing out on dividends and bonus shares if you don’t routinely log into your demat account. Check what demat account.
- Charges and penalties: You risk penalties and charges if you fail to pay the annual maintenance fee or any additional fees. Security dangers Your demat account may be more susceptible to security issues if it is inactive. Maintaining an active demat account is crucial. Check What is demat account?
A Demat account is a useful tool for investors, but success in the financial markets requires avoiding frequent errors. Take advice from seasoned investors and steer clear of overtrading, emotional investing, and a lack of due diligence. Focus on asset allocation, adopt a long-term outlook, and use discipline when making investments. Keep an eye on your portfolio frequently, plan your exit, and be aware of tax ramifications. Prioritize your Demat account’s security measures, keep informed, and periodically adjust your portfolio. Avert omitting hidden expenses, make strategic investments, and avoid being influenced by FOMO. Finally, for individualized counsel and strategic planning, think about getting professional financial advice.