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Do Mutual Funds Require a Demat Account

In an age that has no dearth of investment options for you to choose from, mutual funds are one of the most sought-after selections. If you wish to invest in a diverse portfolio of securities but want professional fund managers to select said portfolio, then a mutual fund is an excellent choice for you. You can invest in mutual funds through the official website of a particular fund or through a demat account. 


  • What is a Demat Account? 

A demat account is an account that holds your securities, for instance shares, debentures, or mutual funds, in a dematerialised form. Opening a demat account is a convenient way of holding all the securities in your portfolio in an intangible form, without needing to have actual physical certificates of their ownership. In addition to this, you need not seek the services of a broker to buy or sell securities. 

If you are wondering whether you need to open a demat account to buy or redeem units in a particular mutual fund, then the answer is that you do not. You can carry out the purchase or redemption of mutual fund units by directly approaching the support team at the concerned mutual fund. Although you do need to open a demat account to invest in a mutual fund, there are several benefits of demat account opening

  • Here's why you should open a demat account for managing your mutual fund investments 

Demat account opening carries a wide gamut of benefits for an investor, including the following. 

  1. No need to hold physical certificates of your mutual fund investments: If you choose to open a demat account, then you can easily purchase and redeem units of different mutual funds. The units thus purchased shall be held in your demat account and the units that you choose to redeem shall be transferred directly from your demat account. You are not required to have physical certificates of your mutual fund holdings or worry about the loss of said certificates. 
  2. No need to engage the services of a broker to buy or redeem units in your mutual funds: One of the reasons why a demat account is the best tool for investing in mutual funds is that you can carry out various transactions pertaining to your mutual fund holdings on your own. There is no necessity for the intervention of any broker in the process. 
  3. Easy access to your mutual fund holdings: With the maintenance of electronic certificates of your mutual fund holdings and the electronic bookkeeping that is characteristic of demat accounts, you can have easy access to your mutual fund investments. You can check the latest Net Asset Values of different funds, and make informed and unbiased selections in a timely manner. 
  4. Enhanced degree of safety and transparency in transactions: Having a demat account is akin to having an electronic vault for your investments. The whole process of making trades, and keeping track of fund values becomes much safer and  more transparent than its offline counterpart. 
  • To sum it up

It is advisable to open a demat account to safely manage your investments in mutual funds. You can visit our official website to open a demat account with Motilal Oswal now. It is also easy to check the Motilal Oswal demat account charges, including the account maintenance charges.

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

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