How-to demat closure BSDA trading account AMC charges CDSL account closure holdings transfer

How to close a Zerodha demat account and keep trading

From WebNotes, a public knowledge base. Last updated 20 June 2026. Reading time ~11 min. Level: Intermediate.

Key facts

Can you close demat alone at Zerodha?	No. Zerodha does not close the demat while keeping the trading account; the demat is needed to settle delivery
What to do instead	Convert to a Basic Services Demat Account (BSDA) to drop AMC to nil up to Rs 4 lakh of holdings
Clear holdings first	Sell holdings, or transfer them out to another demat in your own name, before any closure
Demat AMC at Zerodha	Free first year; then BSDA slabs (nil up to Rs 4 lakh, Rs 100 plus GST for Rs 4 to 10 lakh, Rs 300 plus GST above Rs 10 lakh)
Closure timeline	Around 2 working days once holdings and balances are cleared
Cost	Free to close; off-market transfer out costs Rs 25 per transaction, closure-cum-transfer at Zerodha is free

Procedure

Decide whether you need closure at allIf the goal is only to stop demat AMC, convert to a Basic Services Demat Account instead of closing. Closure is right only if you no longer want any demat or trading relationship with Zerodha.
Clear all holdings from the dematSell every security in the demat, or transfer the holdings out to another demat held in your own name through CDSL Easiest or a delivery instruction slip. A demat with balances cannot be closed.
Settle funds and cancel mandatesWithdraw any free cash, clear negative balances, and cancel SIPs, mandates and pledges so nothing is pending against the account.
Submit the account closure requestRaise the closure from Console under Account, Segments, Account closure, and e-sign it with Aadhaar; Zerodha closes the trading and demat together as one account.
Confirm AMC has stoppedVerify in the next billing cycle that no annual maintenance charge is raised, since AMC stops from the date the closure is processed.

You cannot close a Zerodha demat account on its own and keep the trading account running. Zerodha’s own support guidance is explicit: the demat cannot be closed while the trading account stays open, because equity delivery and physically settled stock derivatives must settle into the demat. The two sit inside one combined account, and closing one closes both. If your real aim is to stop paying demat annual maintenance while keeping the ability to trade, the correct route is not closure at all; it is a conversion to a Basic Services Demat Account , which drops the maintenance charge to nil while your holdings stay at or below Rs 4 lakh.

This guide separates the two questions people conflate. One is whether you can run a trading-only relationship with no demat; at Zerodha, for a resident individual, you cannot. The other is how to stop the demat costing you anything while you keep trading, and that has a clean answer in the BSDA framework. The guide also covers the case where you genuinely want out, clearing holdings first, the closure mechanics, and what happens to the annual maintenance charge.

Conflict-of-interest disclosure. This guide is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this guide does not carry it and earns no referral commission from the procedure described here.

Why a demat-only closure is not offered at Zerodha

A demat account holds your delivery equity, exchange-traded funds , bonds and sovereign gold bonds in dematerialised form with a depository . The trading account routes orders to the exchange. When you buy equity for delivery, the shares are credited to the demat on settlement; when you sell, they are debited from it. A physically settled stock futures or options position also delivers into the demat. The demat is the settlement endpoint, so a trading account that places delivery orders has nowhere to settle them without one.

That is the reason Zerodha gives for refusing a demat-only closure. The account is issued as a combined trading and demat under a single client ID, and the closure request in Console acts on the whole account, not on the demat leg alone. There is no resident-individual product at Zerodha that gives you a bare trading account with no demat behind it. A few intraday-only or derivatives-only setups exist at other brokers, but Zerodha does not offer a standalone trading account to resident individuals, and the support team states plainly that the demat cannot be closed while the trading account remains open.

This matters because the usual motive behind the question is cost, not function. People want to stop the annual maintenance charge on a demat they rarely use, while keeping the login to trade occasionally. Closing the demat would defeat the trading they want to keep. The framework already has a purpose-built answer for that motive, and it is the BSDA.

The real fix for the cost motive: BSDA

A Basic Services Demat Account is a regular demat with a reduced maintenance charge, created by SEBI for small investors. It is the right tool when you want to keep trading but stop the AMC. The current framework comes from SEBI circular SEBI/HO/MIRSD/POD-1/P/CIR/2024/91, dated 28 June 2024, effective 1 September 2024, which raised the eligibility ceiling to Rs 10 lakh and reset the maintenance slabs.

Under that circular, as Zerodha applies it on its charges page , demat annual maintenance runs on three slabs from the second year onward (the first year is free for every new resident-individual demat):

Holdings value in the demat	Annual maintenance charge
Up to Rs 4 lakh	Nil
Rs 4 lakh to Rs 10 lakh	Rs 100 per year plus 18 per cent GST, billed quarterly
Above Rs 10 lakh	Rs 300 per year plus 18 per cent GST, billed quarterly

A non-BSDA demat pays Rs 300 per year plus GST regardless of holdings value. So for a small portfolio, converting to BSDA takes the AMC to nil, which is the saving people are actually after when they ask to close the demat. The BSDA eligibility condition is that you hold only one demat account across all depositories as the sole or first holder. Holding a second demat anywhere disqualifies you, so consolidate before converting.

The trade-off is mild. A BSDA at Zerodha behaves like a normal demat for buying, selling, holding and pledging; the only practical constraints are the single-demat rule and the holdings ceiling for the nil slab. For a reader who wants to keep trading and stop the maintenance charge, this is the answer, and it requires no closure at all.

When closure is genuinely the right call

Full closure is the right step only when you want to end the relationship with Zerodha entirely: no demat, no trading, no Coin mutual fund holdings. That is a real decision for someone consolidating to a single broker, switching to a broker with a different fee or platform, or winding up an account they no longer use. In that case the closure removes both legs together, which is the behaviour the account was designed for.

Before you start, be clear that closure is final. Zerodha does not reopen a closed account under the same user ID, and access to Coin and any mutual fund holdings held under that account ends with it. If you have any doubt, a BSDA conversion is reversible in spirit, since you keep the account; closure is not.

Step-by-step procedure

The numbered procedure box at the top of this guide lists the closure sequence. The detail below expands each step, with the holdings work that has to happen first.

1. Decide whether you need closure at all

If the goal is only to stop the AMC, stop here and convert to a BSDA instead, using the slabs above. Closure is appropriate only if you want no further demat or trading relationship with Zerodha. Treating the two as the same thing is the most common mistake, and it costs you the trading access you meant to keep.

2. Clear all holdings from the demat

A demat carrying balances cannot be closed. You have two ways to empty it. The first is to sell everything on the exchange, which attracts the standard delivery DP charge of Rs 15.34 per scrip on the sell side, made up of Rs 3.5 CDSL fee, Rs 9.5 Zerodha fee and Rs 2.34 GST, charged once per scrip irrespective of quantity. The second is to transfer the holdings out to another demat held in your own name, through CDSL Easiest for a CDSL-to-CDSL move or a delivery instruction slip for an off-market transfer. An off-market transfer costs Rs 25 per transaction at Zerodha, but a closure-cum-transfer, where you shift the holdings as part of the closure, is done by Zerodha at no extra charge.

Only free balances move. Securities under lock-in, pledge or a freeze marked by a court or enforcement agency do not transfer and must be released first.

3. Settle funds and cancel mandates

Withdraw any free cash to your linked bank account, clear any negative balance, and cancel running SIPs , UPI mandates , pledges and the DDPI if active. Anything pending against the account stalls the closure, so the account has to be left clean.

4. Submit the account closure request

Raise the closure from Console under Account, then Segments, then Account closure, and e-sign it with Aadhaar. The request acts on the combined trading and demat together. Zerodha processes a clean closure in about 2 working days. You can also submit a physical closure form to the registered office if you prefer paper, in which case the depository’s account closure request form applies, naming the target account if you are transferring holdings out.

5. Confirm AMC has stopped

Annual maintenance stops from the day the closure is processed. Check the next billing cycle to confirm no AMC is raised. If you converted to BSDA rather than closing, confirm instead that your holdings sit in the nil slab and that no maintenance is billed.

Holdings transfer mechanics in more detail

Transferring out before closure is the route to keep your portfolio intact at another broker. The depository move depends on where the receiving demat sits. A CDSL-to-CDSL transfer runs through CDSL Easiest , the depository’s online off-market transfer facility, once you register and add the target demat as a beneficiary. A move to an NSDL demat uses a physical or electronic delivery instruction slip, since Zerodha’s demat is on CDSL. The receiving broker’s client master report carries the target demat number, holder name and depository details you need to enter.

The name on the receiving demat must match the name on the Zerodha demat, because an off-market transfer between two demats of the same holder is treated as a non-sale movement. A transfer to a third party’s demat is a different transaction with its own tax and stamp-duty implications and is not part of a closure. Keep the transfer to your own accounts unless you intend a gift or sale, which is a separate matter.

What this means in practice

For most readers asking the question, the answer is the BSDA, not closure. You keep the trading account, you keep the demat, and you stop the maintenance charge while your holdings stay at or below Rs 4 lakh. Convert, consolidate to a single demat, and the cost concern is resolved without losing the ability to trade.

Closure belongs to a narrower case: leaving Zerodha entirely. There you clear the demat by selling or transferring out, settle funds, cancel mandates, and submit the closure that ends both legs together in about 2 working days. The one thing the framework will not do is split the account so you keep a trading login with no demat behind it, because delivery has to settle somewhere, and at Zerodha that somewhere is the demat you are trying to close.

What can go wrong

Expecting a trading-only account after demat closure: Zerodha does not offer this to resident individuals. Closing the demat closes the trading account too. Use BSDA if you want to keep trading.
Closure request rejected for non-zero holdings: a demat with any securities, pledge or freeze cannot be closed. Sell or transfer out and release all locks first.
Confusing the Rs 15.34 sell charge with transfer cost: selling holdings costs Rs 15.34 per scrip on delivery; an off-market transfer out is Rs 25 per transaction, and closure-cum-transfer at Zerodha is free. Pick the cheaper route for your situation.
Holding a second demat while seeking BSDA: BSDA needs a single demat across all depositories. Close or consolidate the other demat before converting, or the nil slab will not apply.
Assuming closure is reversible: a closed Zerodha account cannot be reopened under the same user ID, and Coin mutual fund access ends with it. Convert to BSDA if you might come back.

External references

References

Zerodha support, Can I close the demat account and keep the trading account open? (as of 20 June 2026).
Zerodha support, How do I close my Zerodha account? (as of 20 June 2026).
SEBI circular SEBI/HO/MIRSD/POD-1/P/CIR/2024/91, Facility for Basic Services Demat Account (BSDA) for Financial Inclusion and Ease of Investing, 28 June 2024, effective 1 September 2024.
SEBI (Depositories and Participants) Regulations 2018, as amended.
Zerodha, charges schedule, zerodha.com/charges (accessed 20 June 2026).

Frequently asked questions

Can I close my Zerodha demat account and keep the trading account open?

No. Zerodha does not let you close the demat alone while keeping the trading account, because equity delivery and physically settled contracts settle into the demat. To trade equity delivery you need the demat. If you only want to cut demat cost, convert to a BSDA instead.

How do I stop paying demat AMC without closing the account?

Convert to a Basic Services Demat Account. Under the SEBI BSDA framework, annual maintenance is nil while your holdings stay at or below Rs 4 lakh, Rs 100 plus GST between Rs 4 lakh and Rs 10 lakh, and the regular Rs 300 plus GST above Rs 10 lakh.

What must I do with my shares before closing the demat?

Clear the demat first. Sell every holding, or transfer the securities out to another demat held in your own name through CDSL Easiest or a delivery instruction slip. A demat carrying balances, pledges or freezes cannot be closed.

Does Zerodha charge to close a demat account?

Closure itself is free. Selling holdings attracts the usual Rs 15.34 per scrip delivery DP charge, and an off-market transfer out costs Rs 25 per transaction; a closure-cum-transfer to another demat in your own name is done by Zerodha at no extra charge.

Can a Zerodha trading account run without any demat at all?

Not as a standalone equity account. The Zerodha account is a combined trading and demat; delivery equity must settle into the demat. There is no resident-individual structure at Zerodha that gives a trading account with no demat behind it.

Will closing the demat stop the annual maintenance charge?

Yes. Once the closure request is processed, Zerodha stops charging AMC from that date. If your only concern is the AMC, a BSDA conversion achieves the same saving up to Rs 4 lakh of holdings without giving up the account.

How long does Zerodha demat closure take?

Around 2 working days once holdings are cleared, balances settled and mandates cancelled. The account cannot be reopened under the same user ID, so closure is final.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 20 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.