Is it good to have multiple Demat accounts?

Yes, having multiple demat accounts can be good as you get to access different services and tools, which help you plan and strategise as per your requirements. However, managing multiple demat accounts can become challenging and expensive due to multiple AMC charges. So, it’s crucial to consider your financial goals and ability to manage all accounts effectively.

Can we open two Demat accounts with the same mobile number?

Yes, you can have two demat accounts with the same mobile number and different depositary participants (DPs) or brokers because your PAN is the primary identifying information.

Which is India's No. 1 Demat account?

The best demat account depends on your investment strategy and requirements. Factor in the costs, access to tools, user interface and other aspects while comparing your options.

How many demat accounts can be linked to my PAN card?

There’s no limit on the number of demat accounts you can have with your PAN. However, it’s important to remember that your accounts have to be with different DPs, meaning you can’t have 2 accounts under the same PAN with one DP.

Pros and Cons of Opening Multiple Demat Accounts

Your investing life begins with opening a demat account. If you are wondering: Can you have more than one demat account? The short answer is yes, but there are numerous advantages and drawbacks to having several accounts. In this blog, we will explore whether you can have more than one demat account, the benefits and cons of having more than one account.

Key Takeaways

Multiple demat accounts allow investors to diversify brokers, segregate portfolios, and access specialised trading tools for different investment strategies.

Operating several demat accounts increases administrative work and maintenance costs, making it suitable only for organised and active investors.

Multiple accounts are useful when managing family portfolios, handling intraday or derivative trades, or using exclusive broker-specific benefits.

A single demat account is best for beginners or low-frequency traders, offering simpler management, lower costs, and a consolidated investment view.

Can a Person Have Multiple Demat Accounts?

Yes, multiple demat accounts are allowed. Each account should be maintained with a different depository participant (DP) or broker. Although this is legal, as per the SEBI rules, all these accounts should be connected under a single PAN card.

The advantages of having multiple demat accounts mean that you can diversify among brokers, access various platforms and even segregate investments as you please. However, you are not allowed to open more than one account with the same broker using the same PAN. In addition, you have to maintain several AMCs, trace holdings and file tax returns to manage numerous accounts. Being aware of the regulations is crucial to ensure you utilise your accounts without any hiccups regarding regulatory and administrative complications.

Pros of Opening Multiple Demat Accounts

Opening multiple demat accounts has many strategic benefits to investors who have different portfolio objectives. One of the largest advantages is having multiple brokers that provide specialised services such as low brokerage, access to niche research reports, or specialised trading platforms. Multiple demat accounts also allow you to select the most suitable features of each provider and to match your financial goals, such as long-term investments, active trading, or derivatives.

Portfolio segregation is another major strength. For example, you may open a long-term account, a short-term account, or an options account. This simplicity in allocation aids you in tracking performance, risk and tax concerns with relative ease. It also helps in family-wide investing; separate accounts of the children or aged dependents help in efficient management and succession planning.

Several accounts serve as a backup system: in case one of the broker platforms has gone offline or has technical issues, you can continue trading through another account. Lastly, when you have multiple demat accounts, you can take advantage of competitive offers and incentives offered by brokers, like lower AMCs or research subscriptions.

Cons of Opening Multiple Demat Accounts

One of the biggest downsides of opening multiple Demat accounts is the increase in charges relating to each account that you face. Even if your DP allows you to open an account free of charge, it is most likely that there will be a nominal account maintenance fee attached to that Demat account. In addition to this, transaction fees are also charged every time you make a trade. Therefore, if you are operating and trading through multiple Demat accounts, then you will be paying higher maintenance and transaction fees, which could eat into the profits you are making through your trades.

Another downside, when considering the pros and cons of a Demat account, is that each Demat account requires individual time and attention. If you have multiple Demat accounts, your time investment increases. If you have a day job or are not looking to be an active investor, then operating multiple accounts might be an inconvenience. Operating multiple Demat accounts also demands good bookkeeping skills from the investor due to the various monthly, quarterly, and annual statements.

When to Consider Multiple Demat Accounts?

You should think of having more than one Demat account in case you use different investment strategies or need different sets of brokers. You can open several accounts to be used when actively trading in the intraday or derivatives segments and have a separate account to hold long-term holdings. Multiple demat accounts also come in handy when managing portfolios of multiple members of the family or exploiting special offers from brokers. But keep in mind that the numerous accounts would require greater control over charges, portfolio management and tax filings.

Also, check out: Can You Have 2 Demat Accounts?

When to Stick with a Single Demat Account?

A single Demat account can be an ideal option for investors with a simple portfolio with long-term investments and low trading volume. It will ease record-keeping, decrease maintenance costs and eliminate the hassle of dealing with numerous accounts. One account also provides consolidated information on holdings and transactions, which is useful in effective portfolio analysis. It is this simplified method that beginners find easier because it reduces all administrative overheads and instead calls their attention to investing and not managing accounts. When you trade very rarely and when you find it convenient to use the platform and services of a certain broker, it is best to maintain one Demat account and which eliminates confusion and cost efficiency.

Conclusion

Having multiple Demat accounts can be a good strategic move if you are an experienced investor who is making calculated decisions. Different DPs offer various pros and cons of a Demat account, which can be tactfully utilised to maximise returns. However, if you are not able to successfully keep track of and operate multiple Demat accounts, then opening a Demat account with multiple brokers could net you lower returns due to increased charges. Generally, one must look to optimise the benefits one gains from one DP, given that digital platforms allow for fast opportunities before they look to open multiple Demat accounts. You can now consider the pros and cons of a Demat account and apply it to your investment plans to gauge if having multiple Demat accounts is the right move for you.