How-to How to Zerodha BSDA demat account AMC

How to convert a regular demat to a BSDA at Zerodha

From WebNotes, a public knowledge base. Last updated 19 June 2026. Reading time ~11 min. Level: Beginner.

Key facts

Time required	Automatic at the end of the billing cycle; a few minutes to consolidate accounts if needed
Cost	Free to convert; AMC falls to nil up to Rs 4 lakh in holdings
Documents needed	None for auto-categorisation; PAN-linked single demat account is the requirement

Procedure

Confirm you hold only one demat account against your PANBSDA requires a single demat account per PAN across all brokers. If you hold more than one, you remain on regular AMC even if each account is small.
Check your holdings value is under Rs 10 lakhBSDA applies only while combined debt and non-debt holdings stay below Rs 10 lakh. Above that, the account is a regular demat account, not a BSDA.
Let Zerodha auto-categorise the accountZerodha categorises an eligible account as BSDA automatically; there is no application form to fill. The check runs at the end of each billing cycle, not on demand.
Consolidate or close any second demat accountIf you hold a second demat account, transfer its holdings into one account and close the other. With a single PAN-linked account, conversion to BSDA then happens automatically.
Verify the BSDA flag in the Client Master ReportOpen your Zerodha Client Master Report (CMR) to confirm the BSDA flag is set. The CMR is the document that records whether the account is categorised as BSDA.
Confirm the AMC change in your funds statementAfter categorisation, the lower BSDA AMC applies from the next billing cycle. Check the funds or ledger statement on Console to confirm the reduced or nil charge.

A Basic Services Demat Account (BSDA) is a demat account category created by the Securities and Exchange Board of India (SEBI) that charges nil annual maintenance for small holdings, set so that occasional and small investors are not deterred by a fixed AMC on a thinly held account. At Zerodha, an eligible account does not need a form or a request to become a BSDA: Zerodha categorises it automatically. This guide covers the eligibility limits, how the auto-categorisation works, where to check the status, the AMC change, and what happens when holdings later cross the Rs 4 lakh or Rs 10 lakh thresholds.

The single most important fact is that BSDA is not something you switch on; it is a status SEBI rules assign to any account that qualifies. The work, where there is any, is making the account qualify by holding only one demat account against your PAN. For the wider context, see the Zerodha BSDA reference and the detailed Zerodha BSDA charges breakdown.

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.

What a BSDA is and who set the rules

BSDA was introduced by SEBI in 2012 and revised since, most recently by the circular dated 28 June 2024, which raised the holding ceiling and reset the charge slabs from 1 September 2024. The facility exists for financial inclusion : an investor with a small portfolio pays nil or a capped AMC rather than the standard charge that a demat account carries.

The account is held with a depository, CDSL in Zerodha’s case, through Zerodha as the depository participant. BSDA changes only the maintenance charge and is otherwise an ordinary demat account: the same holdings, the same trading account link, the same statements. It is the annual maintenance charge that differs.

Eligibility: the two tests

An account is eligible for BSDA only when it passes both tests at the same time.

The first is the single-account test. You must hold only one demat account against your PAN, counting every broker and depository participant, not just Zerodha. This is the test most applicants fail. If you hold a Zerodha account and a second demat account anywhere else, neither qualifies, and you pay regular AMC on both even if each is small. SEBI frames BSDA as one account per investor, so a second account anywhere disqualifies you.

The second is the holding-value test. The combined value of debt and non-debt securities in the account must stay below Rs 10 lakh at all times. Cross Rs 10 lakh and the account is no longer a BSDA; it is a regular demat account.

A third condition at Zerodha is account type: only resident individual and NRI accounts are eligible. A non-individual account, such as a company or HUF account, does not qualify for BSDA.

How Zerodha categorises the account

There is no BSDA application form to submit at Zerodha. Zerodha categorises an eligible account as a BSDA automatically when the two tests are met. The check is run at the end of each billing cycle rather than on demand, which follows the SEBI rule that depository participants reassess accounts at the end of every billing cycle. SEBI also required participants to review and convert eligible existing accounts within two months of the September 2024 effective date.

So for a brand-new, single, small account, BSDA categorisation is the default outcome and you do nothing. The only active step arises when something blocks the single-account test. If you hold a second demat account, the route is to consolidate: transfer the holdings out of one account into the account you want to keep, then close the other. With a single PAN-linked account remaining, the account categorises as BSDA automatically at the next reassessment. If you believe you are eligible but the account has not been categorised, the route is a support ticket through the Zerodha support portal, which has a Basic Services Demat Account section under account opening; do not expect a self-service toggle, because there is not one.

Checking the BSDA status

The status is recorded in your Client Master Report (CMR), the document Zerodha issues that lists your demat account details. The CMR carries a BSDA flag that shows whether the account is categorised as a BSDA. You pull the CMR from your account on Console . After categorisation, the lower AMC applies from the next billing cycle, so the second place to confirm it is the funds or ledger statement, where the maintenance charge is posted. Zerodha charges AMC quarterly, every 91 days from the account opening date, and shows it in the funds statement.

The AMC change

The BSDA charge slabs follow the SEBI 2024 circular, which sets the maintenance charge by the value of holdings.

Holding value (debt and non-debt combined)	BSDA AMC under the SEBI 2024 circular
Up to Rs 4 lakh	Nil
More than Rs 4 lakh and up to Rs 10 lakh	Up to Rs 100 per year
More than Rs 10 lakh	Not a BSDA; regular AMC applies

Up to Rs 4 lakh in holdings, the AMC is nil. Between Rs 4 lakh and Rs 10 lakh, SEBI caps the BSDA AMC at Rs 100 per year, which Zerodha bills as Rs 25 per quarter plus GST. Above Rs 10 lakh, the account is no longer a BSDA and the regular AMC applies. For a side-by-side with the standard charge, see Zerodha AMC charge and the full Zerodha BSDA charges page.

A separate point on Zerodha’s new accounts: from 1 June, new Zerodha accounts carry no AMC in the first year regardless of holding value, and minor accounts carry zero AMC. BSDA is the rule that governs the charge after that, once the holding-value slabs apply.

What happens when holdings cross a threshold

The two thresholds behave differently, and it is worth being precise about each.

Crossing Rs 4 lakh keeps the account a BSDA but moves it from the nil slab to the capped slab. The AMC rises from nil to the Rs 100-a-year cap (Rs 25 a quarter plus GST at Zerodha). Nothing else changes, and the account stays a BSDA.

Crossing Rs 10 lakh ends the BSDA status. SEBI’s rule is that once the portfolio value exceeds Rs 10 lakh, the account is automatically converted into a regular demat account, and the standard AMC applies from then on. The reassessment runs at the end of the billing cycle, so a brief spike above Rs 10 lakh that falls back before the cycle end need not trigger the change; a sustained value above the ceiling will. If the holdings later fall back below the limits and you still hold only one demat account, the account can be re-categorised as a BSDA at a subsequent reassessment, because eligibility is reviewed each billing cycle rather than fixed once.

This automatic, value-driven switching is why there is no permanent BSDA election. The account’s category tracks the holding value and the single-account test at each billing cycle, in both directions.

What can go wrong

Two demat accounts: holding any second demat account against your PAN, at any broker, disqualifies you from BSDA. Consolidate into one and close the other.
Expecting a toggle: there is no Convert to BSDA button. Categorisation is automatic when you meet the tests; raise a support ticket only if you qualify and it has not happened.
Checking too soon: the reassessment runs at the end of the billing cycle, not instantly. The BSDA flag and the lower AMC appear from the next cycle.
Crossing Rs 10 lakh: sustained holdings above Rs 10 lakh convert the account back to a regular demat account and restore the standard AMC.
Assuming nil AMC above Rs 4 lakh: the nil slab ends at Rs 4 lakh. Between Rs 4 lakh and Rs 10 lakh, the capped Rs 100-a-year AMC applies.
Non-individual accounts: company and HUF accounts are not eligible; only resident individual and NRI accounts qualify at Zerodha.
Outdated KYC blocking a manual route: if you open a support ticket, update any stale KYC details first so the request is not held up.

External references

References

SEBI, Facility of Basic Services Demat Account (BSDA) for Financial Inclusion and Ease of Investing (SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/91, 28 June 2024), effective 1 September 2024; nil AMC up to Rs 4 lakh, capped at Rs 100 per year for more than Rs 4 lakh and up to Rs 10 lakh.
SEBI Master Circular for Depositories, October 2023, on demat account maintenance, superseded in the relevant part by the 2024 BSDA circular.
Zerodha account opening support, Basic Services Demat Account explanation and charges (support.zerodha.com, accessed 19 June 2026).

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