Can I link multiple bank accounts to my demat account? MintGenie answers

While the primary bank account linked to the demat account serves as the designated account for fund transfers and settlements, investors often wonder if they can link multiple bank accounts to their demat account for added convenience and flexibility in managing their investments and funds. 

Also Read: How to reactivate a dormant demat account? MintGenie explains

In this article, we’ll explore why linking a bank account to your demat account is essential and delve into the process of transferring funds. We’ll also discuss whether investors can link multiple bank accounts to their demat accounts.

Bank Account Linkage

If you’re considering investing or trading in stocks independently, you’ll need a demat account. Similar to opening a bank account where you submit required documents, opening a demat account with a depository participant (DP) follows a similar process.

To initiate the demat account setup, you’ll need to provide your address proof, PAN card details, and bank account details to the DP. Once submitted, the DP will link your bank account to your demat account, enabling smooth and direct fund transfers between them, allowing for seamless deposits and withdrawals. Many DPs are now offering the convenience of adding funds through UPI.

Also Read: Demat account: How to choose the right depository participant? Here are the important factors to consider

Further, dividends and other corporate cash benefits from the company are directly credited to the bank account linked to the demat account. DPs only allow their clients to add one bank account. 

Primary bank account linkage with multi-bank fund transfer option

Your demat account can only be linked to one bank account, but you can transfer funds to your trading account from multiple bank accounts. For example, you can add funds from a bank account that is not linked to your demat account, and there is no limit on the number of bank accounts you can use for this purpose.

Also Read: What is the difference between a demat and a trading account? MintGenie explains

However, when withdrawing funds, they will be transferred to the bank account linked to your demat account.

FAQs

Is it possible to link one bank account to multiple demat accounts?

Yes. You can do this if you have multiple demat accounts with different DPs. You cannot link more than one bank account with the same DP. 

Can I switch to a different bank account after opening a demat account?

Yes, you can switch to a different bank account after opening a demat account. Most DPs allow investors to update their bank account details by submitting the necessary documents and following the prescribed procedure.

Can shares be moved between different depository participants?

Yes, it is possible to transfer shares or other securities from one DP to another. However, it’s important to understand that while securities can be transferred, funds cannot be directly transferred between DPs. 

What do pay-in and pay-out signify in a demat account?

Pay-in refers to the process of depositing securities or funds into your demat account. Deposits can be made with a minimum amount of ₹100, with the maximum limit varying depending on the brokerage firm. On the other hand, a pay-out involves withdrawing securities or funds from the demat account to the designated bank account.

Will my broker transfer unused funds to my demat account?

Yes, brokers usually follow a running account settlement for their clients. This entails that any surplus funds left in the demat account are refunded to the linked bank account within a designated time frame.

SEBI has mandated all stockbrokers to return unutilised fund balances in the client’s trading account to their primary bank account.

How long does it take to withdraw from a brokerage account?

The duration for withdrawing funds from a brokerage account to your bank account can vary depending on several factors, including the broker’s policies, the method of withdrawal chosen by the investor, and the processing time of the bank involved. 

Generally, withdrawals from a brokerage account can take anywhere from one to several business days to reflect in the investor’s linked bank account.

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Published: 11 Mar 2024, 06:54 PM IST