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Pros and Cons of having Joint Demat Account with a Family member

You’re probably aware of the fact that a demat account is essential to invest in the stock market. But did you know that you can open a joint demat account? Yes, you read that right. Just like with bank accounts, you can choose to open a joint demat account with one or more of your family members. That said, having a demat account in joint names has its own pros and cons. And that’s exactly what we’re going to be seeing in this article. So, let’s begin. 

What are the pros of having a demat account with joint holders

Let’s start with the advantages that you get to enjoy by opening a joint demat account. Here are three of them. 

1. Maximum security 

Since a joint demat account has two or more holders, you would need the signatures of all of the holders to transfer shares or securities out of the demat account. This reduces the chances of forging or unauthorized transfers significantly.  

2. Easy transfer of ownership 

In the case of death of the first holder, the ownership of the demat account can be quickly and easily transferred to the other holders. All that they would have to do is submit the death certificate of the first holder. 

3. Minimal AMC 

If your family members each have a demat account of their own, they would all have to pay yearly Account Maintenance Charges (AMC) for each of their accounts. This can ultimately drive the cost up. However, with a joint demat account, your family members would have to pay the AMC for just one demat account. 

What are the cons of having a demat account with joint holders

Now that you’re done with the advantages, let’s take a quick look at the disadvantages of a joint demat account. 

1. Transfer of shares is cumbersome 

Remember the first point that we saw under advantages of having a demat account in joint names? That also doubles up as a disadvantage. How, you ask? Here’s how. Now, when you wish to transfer shares from your joint demat account to another demat account, you would have to get the authorization from all of the holders of the joint demat account. While this maximizes security, it also makes the whole transfer process heavy and cumbersome.   


As you can see from the above, the pros far outweigh the cons. That said, if you wish to open a joint demat account online, here’s something that you need to know. With joint demat accounts, you may not be able to complete the account opening process online through the paperless mode. 

Instead, you would have to download the application, fill it up manually, attach all the necessary documents, get the signatures of all the holders, and submit them at the nearest branch office of your stockbroker. If you wish to open a demat account or a joint demat account, Motilal Oswal can help you out. Visit the website to start the account opening process right away. 

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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