Umpteenth Post - Demat & Brokerage Accounts

Hi

I am new to stock trading and probably the following questions have been asked many times before. I did search the forum, but couldn't find posts that answered them all. Since I am new to stock trading, bear with me if I sound inane in this post.

1. What is the difference between a demat account and a brokerage account?
Correct me if I am wrong, but as per my search on the internet and on this forum, demat account is an account to hold shares. Brokerage account is an account with one of the registered brokers with SEBI using which you can buy and/or sell shares. This system allows a trader to buy single shares instead of lots. Even if the demat and brokerage accounts are opened with two different service providers, the transactions will be smooth and error free.
2. As of November 2008, what is the range of charges does a brokerage account carry (if you could include fine prints like account opening charges, closing charges, hidden costs, taxes, services charges etc that will be great)? All I am looking for are ranges of charges and the corresponding brokers.
3. As of November 2008, what is the range of charges does a demat account carry (if you could include fine prints like account opening charges, closing charges, hidden costs, taxes, services charges etc that will be great)? Again, all I am looking for are ranges of charges and the corresponding demat account providers.
4. Are there any big Govt banks (SBI etc) offering demat and brokerage accounts?
5. I have read somewhere that the charges (demat and brokerage) depend on how frequently you trade and the volumes (not sure # of stocks or amount in rupees) you trade. Is true for both demat and brokerage accounts? If so, what are the ranges for Question 3 and 4 for the different frequencies and volumes.
6. This is a bit different from my questions above, I see that all the schemes in ELSS are mutual funds? Can we not invest in individual stocks using ELSS?

If it is too time consuming for the gurus to reply, at least answer Q1, Q4 and Q6. Also, could you suggest that what are all the things that I should ask a brokerage firm and be careful about?

Hope this thread will help other newbees to get all the information at one place. Thanks in advance for the knowledgeable input.

1. When you go to a broker to open an account for trading/investiong: you'd need these:

a. demat account - holds your shares
b. trading account (which you referred as broker account) - perfrom trading for you (online) or call the broker to do the trading
c. bank account - funds trasfer and withdrawl from your brokers account.

A. your demat account will be opened with NDSL or CDSL. there are only 2 depository services in india. some uses ndsl and some cdsl. so broker will do that for you. no worries. if broker can access both, then yes you can have same DP (depository participant) account and hold a different trading acocunt.

2. & 3. Please see Brokerage and Demat matters Section for that. usually, popular ones, like sharekhan, indiabulls, religare, angelbroking, motilaloswal, etc. has 0.05 to 0.01 brokerage based on volume etc. there are many fine prints which can't be discussed here.

4. Yes, Sbi capital, UTI/axis, etc. see Brokerage and Demat matters Section for that.

5. demat has fixed charges, broker charges 50-300rs annually. some provide free demat maintenance, like religare has 0 charges. The brokerage varies with volume, for example see religare's schemes and plans, exp. freedom and trump accounts. every other broker may have such options. you need to find out.

6.Under section 80, Indians can invest upto Rs 1 lakh in ELSS (Equity Linked Saving Scheme, also commonly known as Tax Saver schemes) funds per year/per individual. The amount invested in a ELSS/Tax Saver scheme is Tax deductible on your tax return.

So, the important thing is to save tax not "schemes." you can save tax by putting your money in any "share" e.g., reliance for 1 year and get the tax saving.

i invested in Sbi tax gain ELSS, but i'm getting negative returns, and i stopped it. but i can't get my money out because of 3 year lock in period. day by day the money is going down. better put your money in fixed deposit than those ELSS, as you'll not get negative returns


questions to ask to brokerage firms:

1. What is your brokerage? - try to get as low as possible?
2. What is the intraday and delivery based brokerage? 0.03/0.30 is ok.
3. What are the charges for Demat account opening and "Annual maintenance" charges. This must be zero, not zero for first year then rs. 200 annually. religare has 0 amc (annual maintenance charges)
4. do you provide online - web and software based trading? what are the prices for the software and trading online?
5. do you have call/phone based trading? what are the charges?
6. and most importantly "What are the hidden charges?"

careful about:

1. minimum brokerage even for 1 share. it should not be greater than 0.30
2. annual maintenace charges. should be free. don't pay a paisa for that.
3. monthly charges for software. this also must be free. rkglobal charges monthly charges 500 for software. whereas religare, and others don't
4. call based trading charges, it must be free too. reliancemoney charges 12-25rs.
5. sub-broker agreement.. sub brokers may fool you into signing a sub-broker trade agreement, which takes away 12-25rs on each trade.
6. the broker must be well known, not any mr. get-rich-broker.

Now, friends, please add other issues i missed