It is mandatory to open a demat account to transact in the Indian financial market. The demat account or dematerialisation simplifies the process of transacting in shares or securities. This account holds the shares and securities in an electronic form. Trading and investing using this account is safe and secure.
You must be often wondering about the legality of having more than one demat account or can you open more than one demat account. In this article, we will resolve all your doubts regarding holding multiple demat accounts.
Firstly, let us find out is it legal to hold more than one demat account?
Is It Legal To Have More Than One Demat Account?
Yes, it is legal to have more than one demat account. You must know that it is your PAN card that acts as your unique identifier and it can be linked to multiple demat accounts. Securities and Exchange Board of India tracks your trades not through your trading or demat account but with your PAN card.
The next question that might arise in your mind is why would anyone need another demat account when they already have one. In this section of the article, we will clarify this doubt.
Why Multiple Demat Accounts?
Trading and investing in the stock market is all about finding the right opportunity to make more money. Many investors prefer having two trading or demat accounts. One with a full-service stockbroker and another with a discount stockbroker. This is done to avail the benefit of choosing the stockbroker on the basis of the kind of trade the investors want to take. Also, few investors keep multiple accounts for creating segregation between their trading and investing activities.
Now let us learn about the aspects that you must consider while selecting a stockbroker.
Aspects to Consider While Selecting a Stockbroker
A single stockbroker cannot be good in all the aspects. There are advantages and disadvantages of every broker. Therefore, while selecting a stockbroker you must keep the following aspects in your mind:
- Variety of trading products
- Customer support service
- Research reports
- Number of trading platforms
- Offline presence
The next important question regarding multiple demat accounts is whether you can link a single bank account with multiple trading or demat accounts. In this section of article, we will resolve this query.
Can Single Bank Account be Linked to Multiple Demat Accounts?
Yes, it is legal to link a single bank account to multiple demat accounts. The main advantage of linking a single bank account with multiple demat accounts is that it becomes easier to monitor all your credits and debits. Therefore, it is always recommended to have a single bank account linked to multiple demat accounts.
Another doubt that might come across your mind is whether one can open multiple demat accounts with the same stockbroker? Let us resolve this doubt in this section of the article.
Is It Possible To Open Multiple Demat Accounts With The Same Stockbroker?
No, you cannot open multiple demat accounts with the same broker. The traders are not supposed to have more than one demat account with the same depository participant or broker.
We hope that your queries regarding multiple demat accounts must have gotten resolved. If you are thinking to open your first demat account or multiple demat accounts, you can consider Kotak Securities. They are the number one stockbroker in India. What keeps them ahead of their competitors is their affordable rates along with their premium services. They also have easy to use trading platform and provide the best customer support services.