Is it possible to have two demat account?
A Demat account serves as a holding account for dematerialized stocks and bonds. Dematerialization is the process of transforming an actual certificate of bonds and stock into a digital form for a lender. The Demat account it uses to store the value of the same.
To engage in stock option exchanging, one must first open a Demat account. After creating an account, you can opt to buy and sell shares on your own or with a broker's assistance. A depository is an organization that holds various types of shares, such as stocks, mutual funds, and government bonds, in various formats. They did so online and kept on to when a Depository Participant receives contact from an investor.
However, there are a few questions that one may have, such as "Can I have two demat accounts?" and "Do I only need one?" Continue reading to learn more.
Open a Demat Account
Opening a Demat Account
The first move is to find a registered Depository Participant on websites such as the National Securities Depository Ltd (NSDL) and the Central Securities Depository Ltd (CSDL), where a list of these can be found (CDSL). It may take up to a week or two to open a Demat account, and have a nominee for your account is needed. It is possible to ask directly with a bank about this; however, not all banks have Demat accounts, and others could be exclusive to specific branches.
For a Demat Account, there are a few fees to be aware of that vary from one bank to the next. An opening fee, a repair fee, a custodian fee, and, of course, a processing fee are all examples of such charges. In any of these fees, certain banks charge minimal or no opening fees or even rebate them.
Multiple Demat Accounts
"Can I have several demat accounts?" you must be asking. The response is a resounding yes.
Individuals will open several Demat accounts with separate Depository Participants under their name. KYC data, which include proof of identity, address, and PAN number, are needed by SEBI when opening an account.
Things to keep in mind with multiple Demat Accounts
There are a few essential considerations to make when opening two demat accounts:
1. Having two demat accounts is permissible, but they must not be with the same Depository Participant or Broker.
2. Each Demat account will have its collection of fees, such as opening and recurring maintenance fees, which will charge even though the account is not using.
3. Whether you are a frequent trader or investor, having several Demat Accounts may be beneficial. Multiple Demat or brokerage funds aid in the separation of an investment portfolio.
4. Unused Demat accounts will be frozen, requiring the KYC data to be completed again to reactivate the report; thus, it should not keep the account idle.
5. Keep a close watch on the cash balance and the transfers taking place in the Demat accounts.
Multiple accounts with several brokers are perfectly secure since the Demat Accounts' holdings are not under their authority. Depositories hold the securities, and each depository is registering with the SEBI. With this in mind, if you're wondering whether you should open two demat accounts, the answer is yes. But, there's no need to do so to trade.