Is It Safe to Invest at Just One Brokerage? | Motilal Oswal
Is It Safe to Invest at Just One Brokerage? | Motilal Oswal

Is it safe to put all your money in a single brokerage

Whether you’re just getting started with your finances or have been working on them for a while, investing your money in stocks and shares by opening an online Demat account is a good way to grow your capital. You can either choose to have a single brokerage account or branch out to multiple brokerages depending on your investing strategy. Here the question arises – is it safe to put all your money in a single brokerage?

Investing it in a single brokerage can be both advantageous and have some risks. Let’s take a look:

  • Single agency brokerage:

Brokerage companies usually charge account fees for not maintaining a specific balance or if your account has been inactive with no transactions being made for a long time. Having a single brokerage would mean lower agency fees but having multiple accounts would imply an additional headache of maintaining the specified account balance and paying brokerage that can eat into your investment returns.

  • More Work More Paperwork:

A major advantage of concentrating all your investments under one roof is convenience and ease. Keeping an eye on your cash balances and activities daily can take a toll on those busy with their full-time jobs and businesses. Having a single account makes it easier to keep a track of your portfolio, risk level, assess the funds and return on your investments. Multiple accounts would require the investor to monitor the portfolio and follow the market aggressively to be able to take full advantage of the investing opportunities.

  • Account perks:

Every brokerage firm offers certain perks and incentives like lower commission rates, financial advice, and more such benefits to its customers for maintaining large balances and having multiple large transactions. Having a single account would help you save some money and have a better experience as you can perform all your transactions from only one account whereas your trades get spaced out when you hold multiple accounts.

While there are many advantages of having a single brokerage, multiple brokerages can offer certain advantages too in terms of sign-up bonuses for the investor on opening an account as well as easy access to research tools and information to plan the investment strategy. With multiple accounts, you can diversify your investment portfolio across different firms and, as a result, lower your risks.

Conclusion

There’s nothing stopping you from consolidating investment accounts under one single reputed brokerage firm to reduce the fees, earn more perks, and make it easier to organize your investment strategy. Depending on your needs, you can choose to centralize your assets or spread them across multiple accounts. Whatever you decide, you must choose strategically and trade thoughtfully to earn a good return on your investments.

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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