Benefits of Demat Account: It is necessary to have a Demat account to invest in the stock market and mutual funds. Trading of shares in the stock market and units allotted in mutual funds are deposited in a dematerialized account i.e. demat account. Demat account is also necessary for IPO.
Many people open more than one demat account for trading in shares and apply more than one especially for IPOs. But is it worth it? It also has its disadvantages. Let us know…
Can more than one account be opened?
Market regulator SEBI has not yet issued any guidelines on the issue of demat account. Currently a user can open more than one demat account. There is no restriction on that. PAN card and Aadhar card are required to open a demat account.
advantage
There is no special benefit in having more than one demat account. But problems arise. It becomes difficult to manage multiple accounts simultaneously. By opening a demat account with different brokerage firms, you can avail their various charges and facilities. Two separate demat accounts are availed for long term transactions and short term transactions. So that different accounts for two different goals can be handled easily. But sometimes due to market turmoil, confusion arises regarding the sale of shares.
Loss
Maintaining more than one demat account increases the maintenance cost. Brokerage firms charge transfer fees for trading. Having more than one account increases the cost of transfer fees. It also becomes difficult to track and trade shares of both accounts simultaneously.
