You probably checked the brokerage rate before opening your demat account. Most people do. But there is a separate charge that gets deducted every year whether you trade or not. It is called the Annual Maintenance Charge, or AMC, and depending on your broker, it can quietly cost you between ₹354 and ₹826 per year just to keep your account open.

This article explains what demat AMC is, what it costs across major brokers, why it matters more than most beginners realise, and why Alice Blue offers lifetime zero AMC with no conditions attached.

What Is Demat AMC?

When you open a demat account, your broker acts as a Depository Participant (DP) registered with either CDSL or NSDL – India’s two central depositories, which hold your securities electronically. AMC is the annual fee your broker charges to maintain your account with the depository: record maintenance, holding updates, statements, corporate action processing, and account security.

This charge is not linked to trading activity. You pay it every year your demat account exists and holds – or has ever held – securities, regardless of whether you log in or place a single order.

How AMC Charges Work

You open a demat account with a broker/DP and complete KYC (PAN, Aadhaar, bank details).
Your securities are stored electronically – shares, ETFs, and bonds are credited on settlement.
The DP maintains your records – holdings, debits, credits, corporate actions, pledges, statements.
AMC is charged per the broker’s plan – annually or quarterly, plus GST where applicable.
The charge hits your ledger. If your ledger doesn’t have enough funds, it shows as a debit balance and, if unpaid, can accumulate as dues.
It applies even if you never trade – AMC is tied to account maintenance, not activity.

Always check a broker’s pricing page before opening an account rather than assuming free account opening means free maintenance – they’re frequently bundled in marketing but are two separate charges.

Typical AMC Charges Across the Industry Today

AMC varies widely depending on the type of broker and account:

Account Type	Typical Non-BSDA AMC (incl. GST)	Typical BSDA AMC (₹4-10L holdings)	First-Year Offers
Alice Blue	₹0 (lifetime)	₹0	Lifetime zero – no conditions
Discount brokers (general)	₹0-₹354/year	₹0-₹118/year	Increasingly common, but usually first-year-only
Full-service brokers (general)	₹350-₹850/year	Standard rates typically apply above ₹4L	Varies by plan

A few things worth flagging explicitly, since they trip people up:

“First year free” has become common across the industry – it is not the same as a genuinely lifetime-zero AMC. Once the free period ends, most brokers revert to standard or BSDA-tier charges depending on holding value.
Many brokers bill AMC quarterly rather than as one annual charge, which can make the true yearly cost less obvious at a glance – always check the annualised total, not just the per-quarter figure.
Very few brokers offer a genuinely lifetime-free AMC plan with no time limit and no portfolio-value condition. Most “zero AMC” offers are either first-year-only or tied to staying within BSDA eligibility.

The Actual Cost Over Time

Take an investor who puts ₹1 lakh into stocks and holds for 10 years with a broker charging ₹354/year (post-GST) in AMC. Over 10 years, that’s ₹3,540 paid purely in maintenance fees, with no trading at all.

Now factor in opportunity cost: if that ₹354/year had stayed invested instead, at a 12% annual return, it would grow to roughly ₹6,200 over 10 years. That’s the true cost of AMC – not just the fee, but what the fee could have earned you.

For a smaller, more realistic example: Priya invests ₹25,000 in delivery shares and holds long-term. On a broker charging ₹708/year (₹600 + GST), her AMC alone works out to:

₹708 ÷ ₹25,000 × 100 = 2.83% of her investment value – a meaningful drag before she’s placed a single trade. On a zero-AMC account, that cost disappears entirely (though brokerage, taxes, and DP charges can still apply where relevant).

What SEBI's BSDA Offers and Where It Falls Short

SEBI created the Basic Services Demat Account (BSDA) specifically for small investors. As of the current framework (effective 1 September 2024, unchanged through September 2026):

Holding Value	Maximum AMC
Up to ₹4 lakh	Nil
₹4 lakh – ₹10 lakh	₹100/year + GST
Above ₹10 lakh	Not BSDA-eligible; regular AMC applies

Per CDSL’s BSDA rules, you can hold only one BSDA where you’re the first or sole holder, and you must not hold another demat account as first or sole holder elsewhere – the ₹10 lakh cap is checked across your total holdings, not per account.

Where BSDA falls short: the moment your portfolio crosses ₹10 lakh, you lose BSDA status and full AMC applies – permanently, unless your holdings drop back down. A lifetime-zero-AMC account removes this threshold entirely, which matters significantly if you plan to stay invested and grow your portfolio over years.

How to Waive or Reduce Your AMC

Choose a zero-AMC broker – but read the fine print. “Zero AMC” can mean lifetime zero, first-year-only, BSDA-conditional, or subject to future change. Confirm which one you’re actually getting before opening an account.
Check your BSDA eligibility. If your total holdings across all demat accounts (where you’re the first/sole holder) stay under ₹10 lakh – and especially under ₹4 lakh – you likely qualify for nil or reduced AMC automatically. Check your Consolidated Account Statement (CAS) to see how many demat accounts are registered to your PAN, since holding more than one disqualifies you from BSDA.
Avoid opening too many demat accounts. Every additional AMC-charging account adds a flat annual cost regardless of whether you use it:

Accounts Held	AMC per Account	Total Annual AMC
1	₹300	₹300
2	₹300	₹600
3	₹300	₹900

If you actively use only one, the rest are pure cost.

Close unused demat accounts. Before closing, confirm there are no shares/ETFs left in the account, no pending dues, no pledge or margin positions, and no pending corporate action or IPO allotment – and transfer any remaining holdings first.
Read the full charge sheet, not just AMC. Also check brokerage, DP charges, pledge charges, call-and-trade fees, payment gateway charges, reactivation charges, and statement request fees – AMC is only one line item in total cost of ownership.

AMC vs DP Charges - Don't Confuse the Two

This is the single most common point of confusion, and it matters because a zero-AMC account is not the same as a zero-charge account.

AMC is a recurring annual/quarterly fee for maintaining the account – charged regardless of activity.
DP (Depository Participant) charges are per-transaction fees deducted each time you sell shares from your demat account – applied per company, per day, regardless of quantity sold. These apply only to delivery sell transactions, not intraday trades.

For reference, typical DP charges run around ₹13-20 (broker fee + CDSL/NSDL charge) plus GST per sell transaction, varying by broker. A zero-AMC account can still generate DP charges the moment you sell – that’s expected and separate.

Why AMC Exists

Brokers don’t collect AMC purely as profit. Maintaining a demat account involves real costs: infrastructure to store securities records, cybersecurity, corporate action processing (dividends, bonus shares, splits), and customer service. Not every broker can sustainably offer zero AMC – those that do (like Alice Blue) typically offset the cost through flat per-order brokerage instead of a recurring annual fee.

Common Mistakes Beginners Make

Checking only brokerage, not AMC. Brokerage affects trades; AMC applies whether you trade or not.
Assuming BSDA is unconditionally free. It’s free only up to ₹4 lakh in holdings; above ₹10 lakh, standard AMC kicks in.
Confusing “first-year free” with lifetime free. Several brokers now waive AMC for year one only; full charges apply from year two unless BSDA-eligible.
Ignoring GST on the quoted AMC figure. A “₹300 AMC” is actually ₹354 after 18% GST – always check the total payable amount.
Keeping unused accounts open. Old, forgotten demat accounts can keep accruing AMC and even inactivity charges.
Confusing AMC with DP charges. They’re separate fees triggered by different things – see above.
Choosing the cheapest broker without checking service quality. Low charges shouldn’t come at the cost of poor execution, support, or platform reliability.

Who Should Pay the Most Attention to AMC

Long-term buy-and-hold investors feel AMC’s impact the most. Someone who invests and rarely trades pays little brokerage – their highest recurring cost becomes AMC. For a passive investor with a ₹50,000 portfolio, paying ₹354-826 annually in AMC is a 0.7%-1.6% drag on returns before a single trade is placed.
Active intraday traders placing dozens of orders a month spend far more on brokerage than AMC – for them, ₹354/year is a comparatively minor cost.

The smaller the portfolio and the less frequently you trade, the more AMC eats into your actual returns – which is exactly the investor profile BSDA and zero-AMC brokers are built for.

Alice Blue at a Glance

Alice Blue is a SEBI-registered discount broker, incorporated in 2006, with membership across BSE, NSE, and MCX.

Charge	Amount
Demat account opening	₹0
Demat AMC	₹0 – lifetime, no portfolio condition
Trading account opening	₹0
Trading account AMC	₹0
Equity, F&O, Commodity, Currency brokerage	₹20 per order or a percentage cap, whichever is lower
Mutual fund brokerage	₹0
Call and Trade	₹50 per executed order

Unlike the “first-year free” model now common industry-wide, Alice Blue’s zero AMC has no time limit and no holding-value threshold – it doesn’t convert to a paid plan if your portfolio crosses ₹10 lakh, the way a BSDA account would elsewhere.

Conclusion

Demat AMC is easy to overlook but compounds meaningfully over time, especially for small or infrequent investors. In 2026, most major brokers now offer some form of AMC relief – BSDA eligibility, a first-year waiver, or both – but these come with conditions: holding-value caps, time limits, or automatic reversion to standard rates. The only way to sidestep all of that is a genuinely lifetime-zero-AMC account with no strings attached. Whichever route you take, remember that AMC, DP charges, brokerage, and inactivity charges are four separate costs – understanding all of them, not just the headline brokerage rate, is what actually determines what a demat account costs you to hold.

If you’re planning to start investing, you can open a demat account with Alice Blue and get started.

Frequently Asked Questions

1. What is demat AMC?

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2. Does Alice Blue charge AMC?

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3. What is the SEBI BSDA limit for zero AMC?

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4. What happens if demat AMC is not paid?

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5. What are DP charges and how are they different from AMC?

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