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One can open multiple demat accounts and trading accounts and it is very much legal. However, you are bind to a few conditions when you decide to open multiple demat accounts.<br>This presentation will give you a better undestanding of multiple demat accounts(https://www.edelweiss.in/insight/today-s-perspective-1/multiple-demat-accounts-in-india-all-you-need-to-know-300998).
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Introduction A demat account is short for Dematerialized Account, wherein all your shares and securities are held in electronic form. To make online trading more convenient and easy for everyone, all the securities is converted from physical to electronic form. All your shares, debentures, bonds, Government Securities, units and so on, can be stored in the electronic form. Dematerializing changes the form of holding and not ownership. Hence, to dematerialize all the securities one needs to open a demat account.
Multiple demat accounts One can open multiple demat accounts and trading accounts and it is very much legal. However, you are bind to a few conditions when you decide to open multiple demat accounts. You cannot have multiple demat accounts with the same broker or depositaries Though demat accounts are relatively cheaper you need to pay annual maintenance charges to the depository participant (DP). Also, these charges are applicable even when you do not make transactions by using your demat account
Pros of multiple demat accounts Multiple demat accounts enables you to segregate your investment and trading portfolio Multiple demat accounts mean services by different brokers. With different brokers you can access a variety of trading products and trading platforms For easier monitoring, you can separate your short-term and long-term investments using multiple demat accounts If you are both trader and an investor, then multiple demat accounts can be used to create a separate trading account and investment account. This assures easier tracking of both the accounts and makes your life easier
cons of multiple demat accounts As mentioned earlier, each demat account attracts charges in the form of annual maintenance charges. So if you have multiple demat accounts, you have to pay charges for all of them even when you don’t make transactions If you have more than two demat accounts it can give you a hard time when it comes to tracking and monitoring all the transactions regularly When you have multiple accounts, you may end up not using some of the demat accounts. When such demat accounts remain inactive for longer period, it may result in freezing of the account
