Advantages and Disadvantages of Multiple Demat Account

A Demat account has the flexibility to open more than one  Demat account.  You can choose to open as many Demat accounts as you want. But before opening multiple Demat accounts, you must know the advantages of numerous Demat accounts and the disadvantages of multiple Demat accounts. 

Pros and Cons of Having More Than One Demat Account

Here are the following positives and negatives of multiple Demat accounts: 

Pros of multiple Demat Accounts

• With multiple Demat accounts, you can expand your trading knowledge. For example, suppose a broker provides some insight and other brokers offer a better quality insight, then you can make your future trading decision based on the result. From an online broker to a full-time broker, each stock broker provides different services as per your needs.
• Another benefit of multiple Demat accounts is that they can help you experience different platforms and understand the other functions of each stockbroker.
• You can use multiple Demat accounts for different investment goals, such as short-term. As for long-term investment, you can opt for a Demat account with low AMC. For short-term investment, you can choose a broker with lower transaction fees.
• When you have multiple Demat accounts, you can diversify your portfolio. For example, suppose you want to invest in an IPO that you can do with one Demat account. And you can also keep a Demat account to keep all your debt government securities.
• One of the benefits of multiple Demat accounts is that it helps traders make the trading process broader and more manageable.

Cons of Multiple Demat Accounts

• One of the main problems of multiple Demat accounts is the charges. For example, if a DP offers free maintenance, there would be a charge on a transaction or a nominal maintenance fee attached to your Demat account. Keeping track of all these charges is impossible and can cost you a significant difference in your trading.
• Operating multiple Demat accounts is not a game. You need to focus and track your investment in each Demat account. It requires a lot of time to overlook multiple Demat accounts and if you’re just a weekly investor, then handling multiple Demat accounts is not favorable for your trading.
• If you have opened multiple Demat accounts, you need to maintain different terms and requirements. So if you decide to work on the single Demat account and a single ratio, you will have to turn, or automatically, the Demat account will close. It is the principal disadvantage of multiple Demat accounts.

Can I Open Multiple Demat Accounts in India?

It is not possible to open multiple accounts from a single stockbroker as per the guideline set by SEBI. Many stockbroker firms provide services to open Demat accounts in India, but you cannot open two Demat accounts from one firm. Therefore, you need to use a different stockbroker firm for multiple Demat accounts.

The stockbroker firm provides many facilities related to the stock market. A full-time stockbroker service will provide assistance and stock advisory services. An online broker will provide a platform to trade and low fees to invest and profit. 

Most investors must look at the bright side of making more money in the stock market; the digital era gives the freedom to open multiple Demat accounts. You can consider various Demat accounts if it fits your financial goals.

To open multiple Demat accounts in India, you must approach or install a stockbroker app. Then you need to go through all document submission processes and authorizing credentials. There are several functions and technologies of each broker app. So when you open multiple Demat accounts, there will be confusion with different broker firms. There is also the authenticity of each broker service that is important to us. Finally, you must check the user feedback and quality of service.  

Each stockbroker service provides various offers and services. The best stock broker apps offer the ability to buy and sell shares of stocks and ETFs with no commissions. They also allow you to research investments, track your portfolio, and quickly enter orders to buy or sell. Other financial assets offer less return but a variety of safe financial instruments.  The Pros and cons of multiple Demat accounts are the best way to understand and make your decision to open numerous Demat accounts.

Can multiple Trading Accounts be Opened with the Same Demat Account?

A single Demat account can get linked to multiple trading accounts. It suggests opening a Demat and Trading account through a Single DPs. It will ensure the process of delivery happens smoothly.

Having multiple Demat accounts or Trading accounts will have the issue of mapping. You can use numerous Demat accounts to achieve your goals. 

Multiple Demat accounts will benefit you to segregate and maintain your portfolio. Online trading technology is powerful and fast to make your investment worthy.