The plain answer
The BSDA, or Basic Services Demat Account, is the SEBI-mandated low-cost account for small investors. If you hold one demat account and your holdings stay under ₹4 lakh, your AMC is capped at ₹0; between ₹4 lakh and ₹10 lakh it is capped at ₹100 plus GST per year. Above ₹10 lakh the account stops being a BSDA and the regular AMC applies.
The structure has existed since 2012, when SEBI introduced it for financial inclusion: investors with small portfolios should not lose money every year to an account fee that looks large only relative to their holdings. The current rules come from SEBI circular SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/91 dated 28 June 2024, effective 1 September 2024, which raised the eligibility ceiling from ₹4 lakh to ₹10 lakh of holdings.
The word to remember is capped, not discounted. These are ceilings set by regulation that every depository participant must honour, not promotional offers that a broker can withdraw. The same tier table appears on every broker's pricing page because the table is SEBI's, and the only way to lose the benefit is to break the eligibility conditions, which this page spells out.
The AMC tiers
| Holdings value | Maximum AMC | Status |
|---|---|---|
| Up to ₹4 lakh | ₹0 | BSDA continues |
| ₹4 lakh to ₹10 lakh | ₹100 + GST per year | BSDA continues |
| Above ₹10 lakh | Regular AMC | Converts to a regular account |
The first tier is where most first-time investors live: under ₹4 lakh of holdings the annual maintenance charge is zero, which makes the BSDA the structural answer to the question of whether a demat account can be free for life. The second tier charges at most ₹100 plus GST, which with 18% tax comes to ₹118 per year. Both figures are ceilings, so a broker may charge less, but never more.
The tiers are reassessed every billing cycle against the value of your holdings, which means the AMC you pay can move up and down as the portfolio moves. That revaluation works both ways: a market rally that pushes holdings over ₹4 lakh raises the capped AMC to the ₹100 tier, and a correction that brings them back under ₹4 lakh restores the ₹0 tier the next cycle.
Who qualifies
The eligibility test has three parts, and all three must hold at the same time:
- Individuals only. Companies, partnerships, trusts and HUFs do not qualify; the framework was built for retail individuals and stays closed to entities.
- A single demat account. The individual must be the sole or first holder of exactly one demat account across both depositories, NSDL and CDSL. A second account anywhere, even one opened for a broker offer and left empty, ends the eligibility.
- Holdings within ₹10 lakh. The total value of debt and non-debt securities together must stay under the ceiling, valued by the rules in the next section.
The one-account rule is the clause that disqualifies more people than any other, because opening a spare account is common practice and the rule counts accounts across depositories. Before you open a second account, check the cost: a second AMC and the loss of the BSDA tier together can exceed ₹350 a year for a benefit that is usually zero.
The current circular also makes the flow simpler than it used to be: eligible accounts convert to BSDA by default, so there is no application form to hunt for. The burden is on the depository participant to identify eligible accounts and convert them, not on the investor to claim the status.
The automatic conversion
Under the 2024 circular, an eligible account converts to BSDA automatically unless the holder opts out in writing through a verifiable, authenticated channel such as the registered email. The design flips the old model: instead of small investors filing to get the lower AMC, the depository participant must find them and convert them.
Reassessment is periodic by rule. The 2024 circular asked depository participants to review existing accounts and convert eligible ones within two months of the framework taking effect, and SEBI's December 2025 amendment tightened the rhythm to quarterly: every demat account gets reassessed each quarter, and eligible accounts convert by default in the next cycle.
The practical consequence is that the BSDA status is a moving state, not a permanent label. Your portfolio value, your account count and the quarterly review cycle together decide the status you hold in any given quarter, and the monthly consolidated account statement is where the current status is printed. If the statement shows regular AMC while your situation looks eligible, one written note to the depository participant through your registered email is the fix.
How holdings are valued
The ceiling of ₹10 lakh needs a valuation rule, and the circular provides one that depository participants must apply uniformly:
- Listed securities: the daily closing price, and for mutual fund units the net asset value.
- No price available: the last traded price. For unlisted securities other than mutual fund units, the face value is used.
- Illiquid securities: the last available closing price.
- Suspended securities: excluded from the valuation entirely, since suspension removes the price discovery the ceiling depends on.
- Delisted securities and ZCZP bonds: SEBI's December 2025 amendment excludes these from the valuation as well, effective 31 March 2026, on the same logic: without active trading there is no reliable price.
The December 2025 change matters to a specific group of holders: anyone whose demat still carries delisted shares. Under the original 2024 circular those shares could push the account over the ceiling on paper value; after the amendment they no longer count, which keeps more accounts inside the BSDA structure.
BSDA vs regular account
The BSDA is not a restricted account; it is a regular account with a regulated price tag. The comparison reads:
| Dimension | BSDA | Regular account |
|---|---|---|
| AMC under ₹4 lakh holdings | ₹0 | Broker schedule (e.g. ₹300 + GST at Upstox) |
| AMC from ₹4 to 10 lakh | ₹100 + GST per year | Broker schedule |
| Trading, IPO and SIP access | Full access | Full access |
| Electronic statements | Free | Free |
| Physical statements | Up to ₹25 per statement (SEBI ceiling) | Broker schedule |
| Account count | One demat account, sole or first holder | No restriction |
Nothing in the table shows a service that the BSDA lacks, which is why the opt-out exists in theory but almost never in practice. The only structural difference beyond the fees is the one-account rule, and for a small investor the rule is a feature: it is the discipline that prevents a second AMC from running in parallel.
What people usually get wrong
BSDA restricts trading
The limits are holdings value and account count. Nothing about the BSDA changes what or how much you can trade, or which segments you can use.
I must apply for a BSDA separately
The conversion is automatic for eligible accounts under the 2024 circular and the quarterly reassessment that followed. If yours did not convert, one written note to the depository participant fixes it.
Crossing ₹4 lakh ends the free AMC permanently
It moves the AMC to the ₹100 plus GST tier, and back to ₹0 when holdings fall again. Only crossing ₹10 lakh, or holding a second account, ends the BSDA structure itself.
My second account does not matter if it is empty
The one-account rule counts accounts, not balances. An empty second demat account anywhere ends the eligibility for the first.
Questions people ask
Your monthly consolidated account statement states the account type, so the CAS is the document to check first. If it shows regular AMC while your holdings are under ₹4 lakh and you hold a single account, the automatic conversion may not have applied to your account. In that case a written note to the depository participant through your registered email gets the status corrected.
None. The BSDA limits holdings value and account count, not activity, so a BSDA holder trades intraday, applies to IPOs and runs SIPs like any other account holder. The only differences are the AMC tiers and the capped statement charges.
The account stops being a BSDA and the regular AMC applies from the relevant billing cycle, because the ₹10 lakh ceiling is the outer edge of the framework. The broker or depository participant informs you, and if your holdings later fall back under the ceiling the conversion back is automatic under the same reassessment process.
Yes. Under the 2024 circular you can decline the BSDA status in writing through your registered email or another authenticated channel, which means paying the regular AMC for the same services. Almost nobody opts out because there is no service difference to gain, but the choice exists by design.
The eligibility test runs on the first holder: that person must be the sole or first holder of exactly one demat account across both depositories, and holdings must stay within the ₹10 lakh ceiling. If the first holder meets the conditions, the joint account can be tagged as a BSDA.
The circular caps statement costs for the BSDA structure: electronic statements stay free, and physical statements may be charged up to ₹25 each. That cap is a SEBI ceiling, so check the current price list of your depository participant for the exact figure.
Sources
- SEBI. “Circular SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/91: Facility for Basic Services Demat Account (BSDA) for financial inclusion and ease of investing,” dated 28 June 2024. Accessed 16 August 2026.
- The Economic Times CFO. “Sebi eases BSDA rules, excludes ZCZP bonds, delisted stocks from account valuation.” Accessed 16 August 2026.
- Upstox. “Open a free Demat account,” BSDA note. Accessed 16 August 2026.
- NSDL. Official website. Accessed 16 August 2026.