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.
To open a Demat account online the steps are as follows:
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.
The points are as follows:
The two major benefits of multiple Demat accounts are as follows:
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.
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