Is It Good To Have Multiple Demat Accounts?

Author : nancyahuja2414
Publish Date : 2021-04-14 09:01:07
Is It Good To Have Multiple Demat Accounts?

Demat Account: Meaning

A Demat account is an account that holds the physical certificates of securities in an electronic or digital form. The method of converting these physical certificates into e-form known as Dematerialization. Demat account stands for Dematerialised account. If a person wants to trade or invest in stock market, it is important to open a Demat account. Demat account can be opened with any of the depository participants registered with CDSL or NSDL. 

Many times the question arises in the mind of new traders or investors like, “Can I open two Demat accounts” or is it good to have multiple Demat accounts? We are going to understand the requirements, benefits and drawbacks of having multiple Demat account in the following article. 

Steps for Opening Demat account Online 

 To open a Demat account online the steps are as follows: 

  • Select the reputed stockbroker or depository participant
  • Compare the brokerage rates and services offered
  • Visit the selected stockbroker or depository participants’ website or mobile application
  • Fill in the basic details like name, contact number, and email address 
  • Complete the KYC 
  • Submit the documents along with proof of identity like Voter ID and proof of address like AADHAR card.
  • Complete the document verification process 
  • Obtain the account details from the broker or depository participant 
  • Finally, get an insight about the Demat account dashboard
  • Place the orders to buy and sell securities

Opening two Demat Accounts

Many investors have a query that can we open two demat accounts then you can get the complete answer below.

A trader or an investor can open multiple Demat accounts. However, the only condition is that the second Demat account should be with some different Depository Participant. The steps to open the second Demat account are similar and the documents to be submitted also remain the same as mentioned above. Therefore, it is completely good to have multiple Demat accounts as per the quantum of trade you are planning to carry out every day but at the same time, there is no compulsion to have multiple accounts.

Some important points to consider while opening multiple Demat accounts: 

The points are as follows: 

  1. It is completely fine to open multiple Demat accounts but it should be with a different Depository Participant or stockbroker.
  2. Every Demat account carries its charges depending upon the charges levied by stockbroker or Depository Participant
  3. To segregate investment portfolio and for a regular trader it is good to have multiple Demat accounts 
  4. If the Demat account is not used for a long time it may be frozen and if you want to operate them again, the process of KYC needs to be done again to activate the account. Therefore, be clear about your investment and trading purposes and open a Demat account accordingly.
  5. Always keep a track of your balances in every Demat account regularly.

Benefits of Multiple Demat accounts:

The two major benefits of multiple Demat accounts are as follows: 

  1. When you have multiple Demat accounts and you have applied for IPO, then there are chances you may get an allotment for an IPO 
  2. Secondly, to develop a framework for your investment portfolio and manage it with more ease and efficiency.
  3. A separate demat can be maintained for risky transactions like F&O and derivatives as taxation differs.

Drawbacks of Multiple Demat accounts: 

The only drawback of multiple Demat accounts is that you have to bear multiple AMC charges that are annual maintenance charges.

Conclusion: 

It is completely safe and secure to have multiple accounts with different stockbrokers or depository participants. Be agile and informed about the performances of your investments and transactions. The only key to managing multiple Demat accounts is to keep a track of the account activities and management of transactions.



Category : business

Spinal Implant And Devices Market Report, Size Segments and Growth 2021

Spinal Implant And Devices Market Report, Size Segments and Growth 2021

- The Global Spinal Implant and Devices Market is expected to grow at a CAGR of X% from 2021-2027 to reach USD X million by 2027.


How to Get Rid Of Old or Unwanted Cash for Cars Gold Coast?

How to Get Rid Of Old or Unwanted Cash for Cars Gold Coast?

- We offer top cash for cars Gold Coast up to $9,999 for any type of old, damaged, scrap, used, and unwanted vehicles.


Beauty & Personal Care Market Industry Analysis (2020-2026)

Beauty & Personal Care Market Industry Analysis (2020-2026)

- Beauty & Personal Care Market Worth US$ 684.9 billion - UnivDatos Industry Analysis- by Size, Share, Growth, Trends, and Forecast 2020-2026


Brewing Ingredients Market Report, Growth Segments - Business Size with Forthcoming Developments

Brewing Ingredients Market Report, Growth Segments - Business Size with Forthcoming Developments

- The brewing Ingredients report has been aggregated by collecting informative data of various dynamics such as market drivers, restraints