Can investors hold multiple demat accounts in India? MintGenie answers

Moreover, you can also take part in IPO bidding, receive dividends, and obtain bonus shares directly into your account. (Dividend amounts will be credited to your bank account.)

Also Read: How can one open a demat account? Here are 4 simple steps to follow

However, a common query arises: Can you possess multiple demat accounts, or are you limited to just one? Additionally, how often should you open your demat account to monitor your investment status? And can you transfer funds from one demat account to another? This article will delve into precisely these questions to provide clarity on the matter.

How many demat accounts can you hold?

If you currently have a demat account and are considering opening another with a different depository participant, you’re free to proceed. The process for opening a second demat account remains the same as it was for the first; you’ll need to submit the necessary documents.

Also Read: Demat account offers more than just facilitating buying, selling of shares. Here are 5 main benefits

There is no restriction on the number of demat accounts you can hold simultaneously. You’re allowed to maintain multiple demat accounts concurrently, each with its own set of investments and transactions. 

Pros and cons of having multiple demat accounts

On the positive side, maintaining multiple demat accounts provides you with diverse perspectives on buying and selling stocks. This can include access to various research insights and platforms offered by different stockbrokers, enhancing your decision-making capabilities.

You can keep one demat account solely for IPO participation or to invest in other government securities. This way, you can track your portfolio diversification with ease.

However, monitoring and managing multiple demat accounts can be time-consuming and complex, as different brokers have varying features and requirements. Multiple demat accounts also come with numerous documents, making it challenging to keep them safe and updated.

Also Read: What is a demat account and how does it work? MintGenie explains

FAQs

Do I have to pay more charges if I hold more than one demat account?

Yes, you’ll need to pay account maintenance charges as determined by the depository participant (DP). If you have multiple demat accounts, you’ll be subject to paying more charges since each demat account is opened with a different DP.

Can I trade in multiple demat accounts simultaneously?

Yes, you can trade in securities simultaneously using multiple demat accounts since they have distinct IDs and passwords, and importantly, they are managed by different depository participants.

However, it’s worth noting that brokerage charges may vary among brokers, and these charges might not be the same even if you buy and sell the same quantity of shares in multiple demat accounts.

Also Read: 66 companies to see IPO lock-in expire in four months

Can I transfer funds from one demat account to another demat account? 

No, you cannot directly transfer funds from one demat account to another. Each demat account is linked to a specific bank, so any withdrawals or deposits must occur through that associated bank. 

Will my broker freeze my demat account if it’s inactive for a long time?

If your demat account stays unused for an extended period, your depository participant may freeze it. To reactivate the demat account, you’ll need to complete the e-KYC process again.

Are there any penalties or consequences for not maintaining a minimum balance in my demat account?

No. The depository participant does not prescribe any minimum balance. You can have zero balance in your account.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 05 Mar 2024, 02:18 PM IST