The investment of mutual funds in India has seen all-time highs in the past few years, with many Indians choosing this way to allocate their wealth towards a stable form of growth. Investing in mutual funds is simple these days,and as with anything you can do online, this is just some clicks and you are done. Moreover, you get fund managers who see that you get the best out of your investment, so you don’t have to indulge in much leg work. However rosy this picture of investment may seem to you, investors have reported facing some issues while undertaking transactions with mutual funds through Demat accounts.

Some Drawbacks 

When undertaking any investment that concerns stocks, a Demat account must be opened by investors. This is mandated by the Securities and Exchange Board of India (SEBI), an entity that regulates the realm of investments and trading in India. Demat accounts have many benefits to traders and investors as they hold shares bought in electronic format. It's simple to sell your shares through your Demat account as well, and all these processes, with linked bank accounts and trading accounts, can be done smoothly. 

Nonetheless, investors have reported such issues as the inability to shut SIP accounts easily, or ways to get statements of mutual fund investments through Demat accounts. Furthermore, it's not possible to get a record of any transaction about your mutual funds in any way other than through your Demat account. When you open a Demat account online, you expect that any services you need concerning your mutual fund investments through that account would be available in any online mode. This is not always the case, as Demat accounts online may be inaccessible, or your depository participant/DP (the entity that is authorised to start a Demat account on your behalf) has pulled out some services previously promised. 

Problems Faced By Holders of Demat Accounts

Investing in MFs is a good way to diversify your financial portfolio and this is becoming a popular mode of investment. However, when you choose a Demat account, you must see that your DP offers you a full-service account. Of course, all the services you may want may not be mandated by your DP to give you, so in essence, it may not be your DP’s fault. For instance, you cannot get a physical Demat account statement for your mutual funds from an AMC or a registrar. The statement is only available through your DP. Other issues you may face include the following: 

• In order to make a sale of mutual fund investments, which are in the format of Demat, investors have to provide DPs with delivery slips, and this is tedious. 
• If you have mutual funds held in Demat form, you have to maintain and track records by yourself.
• In case you wish to transact with mutual funds in Demat form, you have to bear the cost of buying and selling as you have to pay fees to your DP or brokerage. Annual Maintenance Charges are also high to maintain Demat accounts. 

Mutual Funds Invested with Great Brokers

Be sure to invest in mutual funds by picking one of the best brokers on the market. Motilal Oswal has years of experience in trading and helps you to help your wealth grow. Investing is the forte of this reliable brokerage, giving you services online, when you open a Demat account which is free of charge. 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account