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Is it Possible to have Two Demat Accounts?

10 Mins 05 Feb 2021 0 COMMENT

Yes, you can have two demat accounts linked to the same PAN card.

The purpose of a Demat Account is to hold shares and securities in an electronic format. When you buy securities, they are credited to your Demat Account. On selling securities, they get debited from your Demat Account.

However, you cannot use a Demat Account for trading in shares. For that, you need a Trading Account. It is recommended that you open your Demat and Trading accounts with the same service provider to ease your transactions. The DP could be a bank or a stock broking firm.

You can open a Demat Account both online and offline. It is convenient to open a Demat Account online as the process saves time. Many banks and brokerage firms also provide free Demat Account opening services.

Can I open two demat accounts?

While looking at how to open a Demat Account, many investors are keen to know if they can open two or more Demat Accounts. The answer is yes. Similar to bank accounts, you can have two or more Demat Accounts. However, the only condition is that all your Demat Accounts have to be linked to the same PAN card.

Every individual has a single PAN card, which is used to open Demat Accounts. A person can open two (or more) Demat Accounts against the same PAN card. All the securities you buy and sell will be linked to you through your PAN card.

However, you cannot have two Demat Accounts with the same stockbroker. The two accounts you open will have to be with different stockbrokers. Also, you cannot apply for more than one application in an IPO despite having multiple Demat Accounts.

Additional Read: How many Demat accounts can one have

Legality associated with Multiple Demat Account opening

It is completely legal to open multiple Demat Accounts. The only thing you must ensure is that all your Demat Accounts are linked to your PAN card. The linkage to the PAN Card is made mandatory as it helps keep track of all share transactions for taxation.

You can verify your PAN Card details offline or online. In the case of joint account holding both account holders are required to verify their PAN card details.

Investors must also fulfill the KYC requirements while opening multiple Demat Accounts.

Things to know about opening multiple Demat Accounts

  • Investors are liable to pay Annual Maintenance Charges (AMC) on their Demat Accounts. These charges are to be paid for all Demat accounts you hold irrespective of whether you use them or not.
  • Though there is no restriction on the number of Demat Accounts you can open, generally having two accounts is advisable. You can designate one account for everyday trading and the other for long-term investments. This tactic helps you monitor and manage your shares effectively.
  • Make sure you keep all your Demat Accounts operational. When you do not use your Demat Account for a prolonged period the stockbroker freezes it as a security measure. Once your account is frozen you cannot access it. To be able to access your account again you will have to request for reactivation and complete the Know Your Customer (KYC) requirement. 
  • You have the option to link multiple Demat Accounts to a single Trading Account. This means you do not have to switch between multiple accounts to make a trade. This allows you to act promptly and make the most of an incredible trade opportunity.
  • If you wish to transfer shares from one Demat Account to another you can do so in a hassle-free manner. All you need to do is fill in the Delivery Instruction Slip (DIS) and submit it to your stockbroker. The stockbroker will further forward it to the depository. On receiving your transfer request, the depository will immediately transfer shares from one account to another. You will be notified on your registered mobile number of the successful share transfer.

Advantages Of Having Two Demat Accounts

There are advantages to having two Demat Accounts. Different stockbrokers offer different services and have a distinctive set of strengths and weaknesses. They allow trading in various products. To reap the best of both worlds, it makes sense to have two Demat Accounts. You can have different trading accounts linked to your Demat Accounts.

Some traders also open two Demat Accounts as they want to segregate their trading and investing practices. The option allows them to focus on their investment goals.

Disadvantages Of Having Two Demat Accounts

There are a few drawbacks to having more than one Demat Account. For instance, you will have to pay separate annual maintenance charges for both the accounts. You also have to track each Demat Account separately.

Conclusion

It is possible for an individual to have more than one Demat Account as long as they are linked to the same PAN card. Also, it may be judicious to note that you cannot open more than one Demat Account with the same broker or DP. There may be many reasons why you may want to open more than one Demat Account. As long as you understand what goes into it, you can go ahead and open as many accounts as you wish.

Multiple Demat Account FAQs

    1.  Can a person hold 2 Demat Accounts with same PAN?

Yes, a person can hold more than one Demat Account as long as they are all linked to a single PAN.

    2.  How many Demat Accounts can one open?

There is no limit on the number of Demat Accounts an individual can open. However, you cannot have more than one account with the same DP. You also need to link every Demat Account with the same PAN.

    3.  Can two Demat Accounts have same mobile number?

Yes, you can open multiple Demat Accounts with the same mobile number and PAN. The only condition is that you cannot hold more than one account with the same DP.

    4.  How can I check how many Demat Accounts I have?

You can check your active Demat Accounts on the NSDL and CDSL websites by providing your PAN card details.

Disclaimer

The contents herein mentioned are solely for informational purpose and shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.