Demat Account: What are the investment limits? Find out here

livemint.com:

The Indian stock market has seen a significant surge in individual investors’ participation over the recent years, driven by factors such as increasing financial literacy, technological advancements, and easier access to trading platforms. Among the essential components facilitating this trend is the demat account or dematerialised account. 

Demat accounts have revolutionised the methods of trading and handing of securities. A demat account is primarily used to store and manage financial securities in electronic form. It stores the securities in a secured way and eliminates the need for physical share certificates. With a demat account, investors can buy and sell a wide range of securities, including stocks, mutual funds, bonds, and derivatives, conveniently through online trading platforms. 

Also Read: Demat Account: Can it be accessed from anywhere and how safe is it? MintGenie answers

Indian depositories such as Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) maintain and manage the demat accounts of investors. When you buy shares through a broker, the shares are credited to your demat account, while when you sell the shares, they are debited or deducted from your demat account. 

While the demat account offers numerous benefits, it is crucial for investors to understand the investment limits associated with them to make informed decisions and ensure compliance with regulatory requirements.

There is no limit to the value of investments held in the demat account. You can hold any value of securities in the demat account.

However, with Basic Service Demat Account (BSDA), there is an upper limit of ₹2 lakh. But, the retail investors do not have to worry about limits.

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