Having a demat account is a main requirement if you want to trade in the stock market and hold shares of a company. A demat account can be opened with any reputed brokerage or the demat section of a bank, and your purchased shares are held in a demat account in electronic format. With a demat account, you get the seamless operation of buying and selling stock in the stock markets, and can open a demat account online easily. However, you may want to open more than one for any reason, and you can do this too.
The Securities and Exchange Board of India (SEBI) has made it mandatory to open a demat account if an investor wishes to invest in the stock market today. A demat account does not only serve the purpose of holding assets in a digital format, but is also linked to a trading account that facilitates the transactions in stock exchanges (buying and selling of shares). Both a demat account and a trading account are further linked with an investor’s bank account to allow for the smooth flow of money (to buy and sell shares). It is certain that you require a demat account to invest in securities like stocks, commodities, etc., but can you open more than a single demat account?
Today, with investment in the stock markets on the rise, several brokerages and banks tempt customers with demat account offers like zero maintenance fees and the like. These may appeal to investors like you, and you may want to open more than one demat account. However, you may be considering whether there are any legal rules binding this. The fact is, investors are free to open multiple demat accounts, whether they are investing in stocks, commodities, or any upcoming IPO. It is perfectly legal to do so. You may wish to open separate demat accounts to hold different asset classes to better organise your portfolio. Nonetheless, there are some aspects to opening multiple accounts, and you should be aware of these.
Consider the following before you open multiple demat accounts:
You can avail of perks if you open multiple accounts. If you open a demat account with one DP and choose to open others with different DPs, you get the facility of keeping your distinct securities organised in separate portfolios. If you are a serious trader and investor, this can be useful. For instance, you may be interested in direct equity, the commodities sector and any upcoming IPO, but wish to hold assets separately to avoid confusion.
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