If you want to invest in shares, ETFs, bonds, or other securities in India, you need a demat account. But not every demat account is meant for the same investor.
Broadly, the main demat account types in India are based on who the investor is. Regular demat account for resident Indians Repatriable demat account for NRIs who want repatriation Non-repatriable demat account for NRIs investing through India-based funds There is also BSDA, which is not a separate investor category but a low-cost version of a demat account for eligible investors. SEBI revised the BSDA framework in 2024, and the current slabs are: no AMC up to ₹4 lakh of holdings, and ₹100 as AMC for holdings above ₹4 lakh and up to ₹10 lakh, provided you are holding only one Demat account across Depositories A demat account is the account where your securities are held in electronic form. You do not open it directly with NSDL or CDSL. You open it through a Depository Participant, or DP, such as a broker or bank, and you get a unique BO ID for future transactions. This is the standard demat account for resident Indian investors. If you are an Indian resident opening an account to buy and hold listed shares, ETFs, bonds, or similar securities, this is the category you will usually open. It is typically linked to a trading account if you want to buy and sell through the Stock Exchange. This is basically the default demat account most retail investors use. Resident Indian individuals First-time stock market investors Long-term investors and traders using Indian broker platforms This type is meant for NRIs who want to invest in Indian securities and keep the option of repatriating funds abroad, subject to the applicable rules. A repatriable setup is generally linked to an NRE account. RBI’s account rules distinguish NRE balances as repatriable, while NRO balances are not freely repatriable in the same way. SEBI’s NRI investor education material also refers to NRI investing on repatriable and non-repatriable basis, and specifically notes NRE or NRO account linkage depending on the route used. NRIs investing in Indian markets through repatriable funds NRIs who want sale proceeds and investment capital to remain eligible for repatriation, subject to rules This is also for NRIs, but the funding route is different. A non-repatriable demat account is generally linked to an NRO account and is used when the investment is made from income or funds kept in India. RBI states that NRO balances are not freely repatriable, except within the permitted limits and conditions. SEBI’s NRI investor material separately recognises investments on a non-repatriable basis for NRIs with NRO linkage. NRIs investing from India-sourced funds NRIs who do not need a fully repatriable route for those investments BSDA deserves a separate section because people often treat it as a completely different account type. It is better understood as a lower-cost demat account option for eligible investors, not as a separate resident-vs-NRI category. SEBI’s 2024 circular expanded the BSDA framework. The current AMC structure is: Up to Rs 4 lakh holdings: Nil AMC More than Rs 4 lakh and up to Rs 10 lakh: Rs 100 AMC More than Rs 10 lakh: the account is treated like a regular non-BSDA account for AMC purposes This matters for small investors because BSDA is meant to keep maintenance costs lower where holdings remain modest. Investors with relatively small holdings Investors who want to avoid regular AMC wherever eligible First-time investors opening a basic demat setup A joint demat account is not a separate resident-vs-NRI category like the three above. It is more about how the account is held. SEBI’s depository FAQs state that a demat account can be opened in a single name or in joint names, with a maximum of three holders: one main holder and two joint holders. Family investing Shared ownership of securities Smoother transmission planning It is a demat account opened in the name of a company, trust, or another eligible entity, subject to documentation rules. It’s simple. If you’re a resident Indian, you’d need a regular demat account. If you’re an NRI using repatriable funds, you’d need a repatriable demat account. If you’re an NRI using India-based non-repatriable funds, you’d need a non-repatriable demat account. And if you’re a small eligible investor looking for lower AMC, BSDA may be worth checking. The exact list can vary a little by broker, but the standard documents usually include: PAN card Proof of identity (e.g.Aadhaar) Proof of address Photograph Bank details In-person/e-KYC verification The DP opens the account after completing the account-opening process and gives the investor an unique BO ID. Brokers will additionally ask for income proof if you want derivatives trading activation. In practice, most people only need to understand three broad demat account types in India. Regular accounts are for resident Indians. Repatriable and non-repatriable accounts are for NRIs, based on the source of funds and repatriation rules. BSDA is a lower-cost option for eligible investors, not a separate investor type. Then there are joint and corporate demat accounts. As we read above, those are more case-specific. They are need-based formats rather than the main categories most investors are comparing.What is a demat account?
Different Types of Demat Accounts
1. Regular demat account
Who should open it?
2. Repatriable demat account
Who should open it?
3. Non-repatriable demat account
Who should open it?
4. Basic Services Demat Account (BSDA)
Who should consider BSDA?
What about joint demat accounts?
When is a joint account useful?
What about corporate demat accounts?
Which demat account is right for you?
Documents usually required to open a demat account
Conclusion