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Pros And Cons Of Opening Multiple Demat Accounts

If you plan to open more than one Demat account, you might have several doubts about it and might be weighing out your options. So, to make it easy for you, we have compiled all the Pros and Cons of opening multiple Demat accounts. 

Before we get started on the Pros and Cons of opening multiple Demat accounts, let us know some basics. 

Pros-and-Cons-of-Opening-Multiple-Demat-Accounts

Do you have an interest in investing your hard-earned money into valuable investment options, especially in the share market? If you are, then this is the perfect article for you. Do not worry; this is not an advertisement for some sharemarket trading platform. We write this article to help you make better decisions and solve any confusions that you may have. 

What Is A Demat Account?

Users can buy shares and stocks and deposit them in a Demat Account when trading online, making it easier to invest. All of an individual’s investments in shares, government bonds, transfer funds, securities, and mutual funds are held in a Demat Account.

A Demat account is an account that stores electronic copies of stocks and bonds. A Demat Account for Beginners is to maintain shares that have been purchased or dematerialized (changed from physical to digital) to make online stock trading easier for users.

Depositories in India provide Demat wallets for free. These services are provided by intermediaries, depository participants, and stockbrokers. The amount of money influences a Demat account’s cost, the type of subscription, and the terms and conditions between the depository and the broker.

To answer whether or not you can open multiple Demat accounts, Yes, having multiple Demat accounts is entirely possible and legal. It does, however, have a flaw. Multiple Demat accounts cannot be opened with the same brokerage business. Before you can open a new demat account, you must complete all of the processes from the start, including KYC.

Pros And Cons Of Opening Multiple Demat Accounts

As a beginner or a trading enthusiast, getting caught up in a web of things is easy. With so many arising questions as you begin your journey, here are a few pros and cons for Demat accounts.

Pros

Having multiple Demat accounts helps you segregate your portfolios. This means that you gain an advantage from the efficiency and also be able to separate your profiles for trading or investment.

You can also arrive at different viewpoints for buying snd selling stocks with multiple Demat accounts. This is possible due to the different stockbrokers or brokerages you get access to.

With a Demat account, you don’t have to worry about losing your credentials because all your assets are safe and secure, anonymously stored in a trading account, in electronic form.

By adding in different Demat accounts, you can ensure that your credit portfolio is well maintained. A diverse portfolio is a key to getting investments snd trust, and securities from firms and financial institutions.

Cons

Having multiple Demat accounts can sometimes be quite derailing as opposed to the pros offered. Almost all traders face this issue, and it is using multiple accounts is that they’re susceptible to additional charges. This includes periodic maintenance charges and transaction fees, which might not be added if you have all your assets in one account.

One other problem such users face is keeping track of all the accounts. You can quickly lose track of multiple Demat accounts and their respective trading platforms since getting used to the differences is quite confusing.

There’s an added disadvantage here as well. Some brokers and brokerage firms will freeze your account and require additional charges for reactivation if you are not active on your Demat account for a while. This is quite problematic with multiple accounts because handling them is tedious and time-consuming. The process of recovery itself can be quite the hassle.

If you’re not a regular or active investor, having multiple Demat accounts might not be your cup of tea. This requires accounting snd bookkeeping skills and dedicated time and attention to organizing and properly managing each account.

We hope this article about the Pros and Cons of opening multiple Demat accounts helped you decide. Weigh both the options and decide what suits you and your needs the best.  The entire name of this account is dematerialized account. Make sure it is the best choice for you at all moments as sometimes what others may find helpful may not be suitable for you. 

About Mohanraj

Mohanraj is SmartFinder's Top Editor.  Have written over 700+ posts for SmartFinder with a team of tech experts. Passionate about technology, Mohan is keen on bringing the latest tech news to millions of internet users in India. Find him on Twitter and Linkedin.

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