How Many Demat Accounts Can You Have?

Opening a Demat account is mandatory for trading securities like stocks, mutual funds, and bonds. A Demat account helps investors to hold their purchased securities in an electronic format.

While starting their investment journey, new investors are unfamiliar with several things and ask numerous questions regarding stock market investments. One of them is ‘How many Demat account can I have?’ This blog explains how many Demat accounts one can have, describing the regulations on having multiple Demat accounts.

Understanding the Meaning of a Demat Account

The process of transferring an investor’s physical certification of bonds and shares to a digital equivalent is known as dematerialisation. Dematerialised shares and securities are kept in an account known as a Demat account. You can open a Demat account with a registered depository participant (DP) or a broker. It helps you to buy shares and other securities online.

If you ask how many Demat account a person can have, you can open more than one Demat account using a valid Permanent Account Number (PAN).

What are the Regulations on Having More Than One Demat Account?

It is legal to open multiple Demat accounts as the Securities Exchange Board of India (SEBI) does not have any limitations regarding this. However, you must keep some important things in mind. Here are the rules and regulations that you must know before opening multiple Demat accounts:

• Your multiple Demat accounts must be established by different DPs.
• To open multiple Demat accounts under the same DP, each account must be linked to a distinct account holder.
• You have to pay the Annual Maintenance Charges (AMC) for each Demat account you open, even if you stop using it.
• For every Demat account you open, there are different fees which you have to pay.

Benefits of Having Multiple Demat Accounts

Having multiple Demat accounts can help investors organise their investments. Have a look at the benefits of holding multiple Demat accounts:

• You can have separate Demat accounts for different things, such as trading and investment.
• You may take advantage of the numerous offers that various Demat accounts provide. For instance, if one account has reduced fees for long-term investments, you can use it for all of your long-term investments.
• Using multiple Demat accounts helps you expand your portfolio. For example, you can apply for an IPO once using each Demat account.
• You do not have to open several trading accounts to maintain multiple Demat accounts. You may link only one trading with your different Demat accounts.

Things to Consider While Having Multiple Demat Accounts

You must consider the following things in mind, as you know how many Demat accounts one can open:

• Each brokerage will have a dedicated charge to open a Demat account. Opening multiple Demat accounts can be costly as a result.
• Make use of applications or tools for tracking your portfolio that combine information from all of your accounts. Ensure you can effectively track and balance assets, dividends, and account activity.
• According to SEBI requirements, all Demat accounts must be linked to your PAN. This can help avoid fraud and guarantee transparency. Keeping accurate records is essential to preventing problems when submitting taxes.
• If you keep your Demat account idle for a long time, your broker can freeze it until you complete the KYC formalities again.

Tips for Managing Multiple Demat Accounts

You must carefully plan and organise to manage multiple Demat accounts. Here are some of the important tips to manage more than one Demat account:

• You must regularly reconcile to ensure accurate tracking of your investments and address discrepancies. Try to use a portfolio management tool to track your transactions. Download the PL Capital Group – Prabhudas Lilladher application to avail portfolio management services.
• Try to set up notifications for each of your Demat accounts to get informed of any transactions, dividends, or other significant occurrences. This guarantees that you remain informed and may respond promptly when required.
• Many brokers allow the option to access numerous Demat accounts using a single login credential. You can use it to manage your investments efficiently.

Conclusion

Several new investors are unsure of the fact how many Demat accounts one can have. Although the answer is multiple, it is essential to keep some important things in mind regarding this. You must link your multiple Demat accounts to your PAN to avoid discrepancies and fraud.

For expert guidance, you can download the PL capital application. PL allows you to open a Demat account for free and avail numerous services.

Frequently Asked Questions

1. Can I open multiple demat accounts with different brokers?

You can open multiple Demat accounts with different brokers. However, you must link each account with your PAN to abide by the rules of the SEBI.

2. How many Demat accounts can be opened legally?

You can open multiple Demat accounts legally, but each account must be linked to a different account holder.

3. Can I have two Demat accounts with the same broker?

As per the SEBI regulations, you cannot open more than one Demat account with the same brokerage firm.

4. Can I link multiple Demat accounts to the same PAN card?

Yes, it is mandatory to link all of your Demat accounts to the same PAN.