How Many Demat Account One Can Have

There is no stock market trading without a Demat account. It’s an absolute necessity to open a Demat account with a registered Depository Participant (DP) and then and only then can you invest in the stock market. But one associated query that has relevance is: How many Demat accounts one can have or open in India?

Further, the legal quotient behind owning multiple Demat account is something to ponder. And if it’s possible to have more than one demat account then exactly how many demat accounts in India can be owned by an individual?

Can I Open Multiple Demat Accounts?

In India, it is possible to have more than one Demat account or multiple Demat accounts. Additionally, there is no such limit on the total number of Demat accounts in India an investor can own.

But this doesn’t mean that there aren’t any regulations or rules to be considered before thinking of opening multiple Demat accounts.

SEBI commands that to open more than one account, the broker has to be different each time. This means that one cannot own more than one Demat account with a given stockbroker.

Also note that to open any number of Demat Accounts, it is required that an investor or trader possesses a valid PAN card. Apart from this, there are different documents required for Demat account opening to validate your identity and address in the stock market.

Benefits of Having Multiple Demat Accounts

Wondering why one looks for opening multiple Demat accounts?

This could be due to many reasons:

• Gaining better trade experience in different segments
• To reap the benefit of trading at the low brokerage

There are brokers offering zero charges for delivery but do not provide better charts for technical analysis for intraday trading.

On the other hand, there are trading apps specifically designed to provide a better experience in the Futures and Options segment but charge high fees for delivery and other segments.

But with multiple Demat accounts, one can get access to multiple trading apps that eventually help traders trade smartly across segments.

In all having more than one account has its benefits as well as limitations. Let’s first see why many investors find it suitable to have many Demat accounts:

Multiple Research And Advisory Resources

With more than one Demat account each with a different broker, you get a mix of research and advisory from each of these brokerage firms. This helps you make better trading decisions.

A comparative analysis of these resources will help in avoiding losses for an investor, especially one who has minimal knowledge of the stock market.

This is just like the concept of the second opinion. So before you invest in big volumes for the long term, these resources come in handy.

Enhancing the Investment Portfolio

Many investors who open multiple Demat accounts, open one with a full-service broker and the other with a discount broker. In this way, they receive the best of both worlds and this helps them enhance their investment portfolio.

Each of these types of brokers provides some unique features and services. With a full-service broker, one gets access to useful research tips. On the other hand, the Discount broker offers highly affordable brokerage charges or plans.

In this way, to have two Demat accounts with each of these types can really prove to be favourable in the long run for an investor who has just stepped into the stock market world.

Multiple Demat Account with One Trading Account

For easier management of funds, it’s advised to have only one trading account but multiple Demat accounts each with a different broker.

You can easily open a demat account online with Choice by following a few simple steps.

Multiple Demat Account Disadvantages

Every coin has two sides. Multiple Demat accounts can benefit investors and traders, but some disadvantages cannot be ignored.

Now, these disadvantages revolve around high charges, mismanagement, freezing, and lots more.

Let’s discuss all these drawbacks one by one in detail.

Multiple Demat Account Charges

Not all Demat account opening is free of cost but some are pretty expensive. And even if one does bear the cost of opening a Demat account, there’s the excessive AMC to think about too.

On top of demat account AMC charges, several stockbrokers also charge hefty transaction charges hence it becomes quite unprofitable to indulge in Intraday Trading.

With multiple Demat accounts the total account charges get added, for example:

AMC Account 1 + AMC Account 2 + Account Opening Charges 1 + Account Opening Charges 2

The above is just an overview of how multiple accounts increase your demat account charges in having more than one account in the share market and can drain your resources very quickly.

Multiple Demat Account Management

Although seasoned traders easily manage two different accounts, new investors find it difficult to properly divide their precious time into multiple Demat accounts. This can lead to acute mismanagement of funds and investment plans.

Multiple Account management is time-consuming. So those investors who want to trade on the go, or just are looking at stock trading as a part-time thing, aren’t able to invest ample time in monitoring all their Demat accounts.

Idle Demat Account Freezing

Initially, many traders are attracted to opening multiple Demat accounts especially when a new stockbroker enters the market with very appealing deals. But most of these accounts are never used and therefore freezing of idle accounts is inevitable.

Conclusion

Yes, one can have more than one Demat account, and this practice has several advantages but the approach has to be such that the limitations mentioned above are avoided at all costs.

And it’s not just the question of opening multiple Demat accounts, more importantly, an investor should be more worried about what broker they must choose and how that broker will serve their trading goals and objectives.

The Choice is a trustworthy and customer-friendly broker with advanced technological trading tools.

You can open free Demat account with Choice very swiftly and without worrying about any unnecessary expenses or taxes.

FAQ

Can I have 2 Demat Accounts?

You can have multiple demat accounts, but you can't have multiple accounts with the same brokerage company. You can have accounts with both full-service and discount brokers at the same time

How many demat accounts are there in India?

As of the latest data in July 2023, India has a total of 123.50 million demat accounts. This marks a significant increase, with 3 million new accounts opened in July, reflecting a growing trend of retail participation in the stock market.