How many Demat accounts can one have
While you are allowed to open multiple demat accounts, you should know the rules
The depository system was introduced in India by the SEBI through the “Depository Act of 1996”. Since then, Indian investors are mandated to open a demat account to participate in the Indian stock market. Short for dematerialised, demat is an account that holds market securities in the electronic form. Depository Participants (DPs) like brokerage companies and banks provide demat accounts.
How many demat accounts can one have?
Investors can open multiple demat accounts, but they need to link their PAN number to every demat account they’ve opened. The PAN number enables Indian regulatory authorities to identify the investment assets linked to their owners, irrespective of the number of demat accounts they own.
Three basic Rules for opening more than one demat account
- Investors can open multiple demat accounts, so long as the accounts are opened with different Depository Participants. You cannot open more than one demat account with the same DP.
- You can open a second demat account with the same DP, but with a different combination of account holders.
- Investors who need multiple demat accounts can open them with different depository participants. So, if you want to open two demat accounts, you need to open one account each with two different DP.
Advantages of opening multiple demat accounts
- Multiple Demat accounts enable investors to segregate between short term and long-term investments easily.
- With multiple accounts, investors can gain access to varied features offered by different brokerage firms.
How to open a Demat account – the steps to follow
- You need to select and connect with DPs (banks or brokerage firms).
- You can apply to open an online account through the DPs website or visit the branch/office of the DP.
- You have to submit self-attested photocopies of your PAN card, ID and address proof documents (as per the documents mentioned in the Official Valid Documents or OVD list).
- If you choose the online account opening facility, you can opt for the Digilocker facility offered by the Government of India to fetch your documents or use your Aadhar number to complete the e-KYC process. You should keep your signature image handy to complete the process. Your bank account details can be verified by the penny drop facility by depositing Rs. 1 in your bank account. Otherwise, you can upload a copy of your cancelled cheque, bank statement or a copy of your bank passbook to verify your bank account details.
- The DP verifies the account opening form and your documents and then opens the Demat account.
Trading and investing in the stock markets have never been this easy. Reach out to professionals to learn more about how you can open a demat account.
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.