Can my Demat Account have Joint Holders?

5 mins read
by Angel One

A couple of years back, traders would execute their trades on the trading floor. You must have seen the trading floor during market hours in movies – chaotic, full of panic, and a house full of men trying to be the first in placing orders. The exchange of shares and money would be recorded on paper, and the purchasers would be given a physical share certificate.

A trading account replaced the trading floor, and the online demat account took over the physical share certificates. The distinction between a trading account and a demat account is crucial to understanding whether demat account joint holders can be possible.

Demat Vs. Trading Account

Demat and trading account both are needed to trade in the stock market. A trading account is an online interface that helps a person buy and sell shares in the market, and it displays all the transactions that you have carried out in the share market. The trading account is the primary interface, where you interact with the market and gauge the orders that you have to place during market hours. The trading account is of prime essence to the day traders, as they square off their positions within the same day or within a short time frame.

However, a demat account is a storehouse or a repository where shares and commodities you purchase are stored. A demat account is the modern-day equivalent of the physical share certificates, and it shows your current holdings across various commodities – gold, ETFs, shares, debt, etc.

Can there be joint holders for a trading account?

The simple one-word answer to this question is no. No, you cannot have joint holders for a trading account. The reason is that every trading account is linked to the individual investor’s PAN. The PAN linkage provides the tax authorities with information related to the income earned by the investor on trading shares and other securities. If there were two or more joint account holders, it would confuse the tax authorities regarding tax liability implications. Hence, having joint holders for a trading account is not permitted.

Can there be joint holders for a demat account?

When it comes to the provisions relating to the demat account, the scenario is different. There can be more than one demat account holder, and you can open a demat account without a trading account; hence the provisions can be different.

How can one have a demat account and not a trading account, you would wonder? It is possible if you do not intend to sell the shares that you own. As talked about earlier, a demat account is a storage hub that helps you store the commodities you possess. On the same lines, a demat account is mandatorily required while applying for an IPO, but a trading account is not.

What are the provisions for demat account joint holders?

The law provides that in the case of a Demat account, there can be a maximum of three account holders. One would be the primary account holder, and the other two would be the joint holders. It is necessary to note that you cannot open a joint Demat account with a minor.

Steps for opening a joint demat account

Let’s dive deep into the steps required to be followed to open a joint demat account.

Step 1: Approach the requisite person or entity

The first step in opening a dematerialized account is approaching a Depository Participant (DP). A DP is a depository agent who acts as an intermediary between the investors and the depository. You can approach banks and stockbrokers for this purpose.

Step 2: Submit documents

The KYC details will be required to be submitted by all the joint account holders. The typical documents required to be submitted are identity proof, address proof, PAN, and Aadhaar card. The process is straightforward to follow, and the service provider should help you through the process.

Step 3: Provide your verification

Depending upon your broker, the requirements could be slightly different. You will have to sign a couple of documents for verification.

NSDL requires in-person verification of the account holders, and the DP’s staff members typically do this by scrutinizing and matching your details. For joint holders, in-person verification is required for all the account holders.

Make sure you select the option for demat account joint holders to open your account accordingly.

Step 4: Approval and account opening

Once all the steps have been correctly followed, the stockbroker or bank will be approving your demat account opening on passing certain company checks. After verification, you will be allotted a demat account number and provided with the account login credentials.

Profit and loss liability

A joint demat account is connected to a single trading account only, and this means that all the communications regarding the demat account will be made to the first account holder. Also, the taxation on the profits made would be the liability of the primary account holder. Hence, the primary account holder must be trustworthy and capable of taking up responsibilities. The person should have been associated with the markets, preferably experienced, and well-versed with market terminology.

What happens in the case of the death of a joint holder?

In the unfortunate death of a demat account joint holder, the securities would be transmitted to the other surviving joint holders. For instance, Mr. A, Mr. B and Mr. C are the joint account holders, and Mr. A dies untimely. The demat account service provider would transfer all the securities to the remaining holders, i.e. Mr. B and Mr. C. The account of the deceased would then be closed by the service provider.


The demat account is as important as a trading account. Remember, you will not be able to trade in shares and securities without a demat account. If you intend on opening a joint demat account, you must understand all the regulations associated with it. Obtain expert guidance if needed and don’t miss out on exciting market opportunities because of procedural delays.