Opening a demat account is the basic thing that you have to do while entering into the stock market. Sometimes the individuals have a query in their minds that whether they can open multiple demat accounts. Or is it legal to have more than one demat account and many more questions in this regard? To help you in resolving all your doubts, this article will address all your queries about having multiple demat accounts.
The first question that arrives in the minds of individuals while opening two or more accounts is whether it is legal to open two or more demat accounts.
Is Opening Multiple Demat Accounts Legal?
In India, it is legal to open multiple demat accounts. You can open any number of demat accounts using the PAN Card. This card acts identifier to your multiple demat accounts and SEBI can track your trades using your PAN Card details. However, you cannot open multiple demat accounts with the same broker. Therefore, you can open one demat account with one broker only.
Things That You Must Know Before Opening Multiple Demat Accounts
- When you open a demat account with multiple stockbrokers, you can avail of their variety of services. Since each broker is different in itself, you can get access to various brokerage reports. Also, you are eligible for many other trading products given by them.
- With every demat account, you will have to pay Annual Maintenance Charges (AMC) in the range of Rs. 500 to Rs. 1000 every year.
- Your demat account might freeze if you do not use it for a long time. To reactivate the account, you will have to complete your eKYC again.
- With multiple demat accounts, you can make the segregation of your trading portfolio and investment portfolio.
- There is no need to open multiple trading accounts if you have multiple demat accounts.
- When you open multiple demat accounts, you will need more monitoring of the transactions in different accounts.
- The holdings of your demat account with multiple stockbrokers are safe as they are kept with the depositories. It is the responsibility of the depositories to keep your shares safe in the demat account. Central Securities Depository Ltd (CDSL) and National Securities Depository Ltd (NSDL) are the two depositories in India.
The above are some of the things that you must be aware of before opening multiple demat accounts. To learn more about the stock market, you may visit Trading Fuel. The beginners in the stock market can regularly visit our website for stock market news and information. We are the leader in providing free stock market education. Subscribe to our website for reading our blogs and articles regularly.