Stock market investment is the most lucrative option for individuals who wish to invest in shares and mutual funds for a long period. A dematerialized account or a demat account is an online locker that allows investors to store their shares and other securities online for hassle buy and sell.
Various brokers offer demat account opening services, which investors and traders can use to open their demat and trading accounts. However, investors have to pay certain annual maintenance charges every year to the brokerage as a fee for opening and maintaining it. Beginner investors with no exposure to the stock market investment process may fear payment of annual maintenance charges. Here a zero AMC demat account proves to be a boon for such investors.
What is a zero AMC account?
A zero AMC demat account is similar to a normal demat account. The only difference is that the investors do not have to pay the annual maintenance charges for such an account. This proves beneficial for both investors and brokerage companies. Beginner investors get to open a free demat account with no charges and brokerage companies can on board new investors to their platform. Perfect for beginners and cost-conscious investors, the zero AMC demat account delivers the same benefits as a normal demat account with no charges. But what is AMC charges for a normal demat account? The annual maintenance charges range between ₹200 to ₹800 depending upon the brokerage company.
Here are the important features related to a zero AMC account
- No maintenance and low brokerage fee
The zero AMC demat account does not require investors to pay a certain sum every year as account maintenance charges. Moreover, some brokerage companies charge low brokerage fees for transactions as compared to normal demat accounts.
- Easy to understand
Beginner investors can understand various features and functionalities related to the zero AMC demat account. Investors can buy, sell, and store securities using the zero AMC account.
- Perfect for long-term investors:
With no maintenance charges, the account is perfect for investors who wish to hold their bought shares and securities for a long period. Long-term investors do not have to worry about a fee that is deducted every year irrespective of conducting a transaction.
How does the Zero AMC help?
- No Annual maintenance charges:
With no annual maintenance charges for a demat account, investors are able to save a significant amount that otherwise would be paid as fees. They do not have to pay the annual recurring charges that may pile up over the year.
- Better returns on investments
Beginners and investors who save and invest in small quantities can get higher returns by opening a zero AMC demat account. They can maximize their returns without worrying about paying the fixed annual charge.
- Investment diversification
Investors do not have to worry about the number of transactions in terms of buying and selling securities. With no account maintenance charges, investors can invest in new securities for diversification without worrying about the number and frequency of transactions.
Conclusion
The zero AMC demat account is the best option for investors who wish to opt for passive investment on a long-term basis. They can minimize their cost by opting for the zero AMC demat account.
