If you want to trade in financial securities like stocks, bonds, and mutual funds in India, you must have a demat account. A demat account holds all your financial security holdings in dematerialised form. It also contains a record of your security transactions and changes in ownership when you buy or sell.
A demat account is provided by banks and Depository Participants (DP). Along with this account, you also need a trading account that provides the interface to buy or sell securities. Let us find out more about a demat account. Can an individual have more than one demat account?
Investors who actively trade and invest across various strategies may benefit from having multiple demat accounts. For example, if you wish to separate your long-term investments from short-term trades, maintaining different accounts helps with better organisation and clarity.
High-volume traders, portfolio managers, or those applying frequently for IPOs may also consider multiple accounts to maximise allotment chances. Investors who want to benefit from varied brokerage services, research tools, and fee structures can also open accounts with different brokers.
Moreover, those exploring different asset classes or trying new platforms without risking their primary holdings may opt for multiple accounts. However, managing multiple accounts effectively requires discipline, regular monitoring, and attention to compliance requirements like KYC and nominee updates.
If you are a passive investor or someone who prefers a simple, low-maintenance approach to investing, sticking with a single demat account is ideal. A single account reduces the administrative burden of managing multiple passwords, statements, and compliance requirements. It also simplifies portfolio tracking, tax filing, and capital gains calculations.
Beginners and long-term investors who focus on buy-and-hold strategies do not need multiple platforms. If you are satisfied with your current broker’s services, charges, and tools, there's little advantage in opening additional accounts.
A single demat account also reduces the risk of confusion, duplication, or missed updates. It keeps your investment life streamlined and manageable while avoiding unnecessary paperwork, account charges, or complications during nominee registration or account transfers.
Managing multiple demat accounts requires organisation, discipline, and regular oversight. Begin by maintaining a record of all account details, including login credentials, broker names, linked bank accounts, and registered email IDs.
Use digital portfolio trackers or spreadsheet tools to monitor holdings across accounts. Assign specific purposes to each account – for instance, one for long-term investments, another for trading, and a third for IPO applications. Always ensure that all accounts are linked to your PAN and Aadhaar to avoid regulatory issues.
Periodically review each account’s activity and close any account that remains unused or redundant. Stay updated on communications from each broker, including dividend credits, corporate actions, or KYC reminders. Ensure consistent nominee details across all accounts to avoid future complications.
Lastly, regularly reconcile your statements and consider consulting a financial advisor for optimising multi-account strategies.
Legally, there is no limit to the number of demat accounts you can hold, as long as each account is linked to your PAN number. However, from a practical standpoint, it is wise to limit the number of demat accounts to two to three based on your investment needs and trading activity. Consolidating your holdings helps in easier tracking, better compliance, and simpler tax reporting. Multiple accounts can offer flexibility and diverse benefits, but they also come with added responsibilities. So, carefully weigh the advantages and drawbacks before deciding to maintain multiple demat accounts for better portfolio management.
Read more:
Documents Required for Demat Account
How to Open a Demat Account?
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
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