A Demat account is mandatory for stocks but not for mutual funds.
A new product of SIP in Stocks is now being offered. This works similar to SIP in Mutual Funds. There is typically a basket of stocks and the investor can fix a specific amount to be invested in those stocks. The weight assigned to every stock might change depending on the product provider. Since this investment is in stocks, a Demat account is required.
In general, it’s advisable to have a Demat account but it ideally depends on the requirement of the investor. There are several benefits of holding a Demat account.
There are a number of benefits of holding a Demat account -
However, there are a few drawbacks of holding a Demat for mutual funds.
If you want to invest mutual funds and are fine with the limited drawbacks, you can go for it. With a Demat, you can hold multiple investments, which can be convenient for you. If you want to open a Demat account, you can opt for 2-in-1 accounts, which act as both trading and Demat account.