Multiple demat account

A Demat account ensures a simple, seamless, paperless, and genuine trading and investing. However, to maintain the genuineness of the process, you need to provide certain documents for opening a demat account.



Some traders like to enjoy the features of both a full-service broker and a discount broker. Multiple aspects determine the quality of a brokerage firm. Since not all brokers can be good at all the aspects, some traders like to open separate demat accounts with different brokers capitalizing on the specialization of each.

However, having two or multiple demat accounts is advantageous only for seasoned and serious traders. Some traders wish to segregate their investments based on duration, goals, stock exchange, stock type, etc. Such traders can open multiple demat accounts to store different types of securities, thus, eliminating any confusion and streamlining the process.

As per the regulations laid down by the Securities and Exchange Board of India, it is entirely legal for open multiple Demat accounts. Linking your PAN Card to your demat account is compulsory. Hence, it does not matter how many demat accounts you open. You can open multiple demat accounts with different brokers and link them to your PAN card.

SEBI tracks your holdings through the single PAN card linked to all accounts and not by mapping individual trading accounts. All the equities in all the demat accounts linked to your unique PAN are considered as your property.

Yes, you can open a single demat account and link it to multiple trading accounts. You may open a demat account with Sharekhan and link it with different trading accounts with brokers providing various services.

Traders who wish to enjoy the facilities of discount brokers and full-service brokers simultaneously can open multiple trading accounts with brokers providing different facilities, and link all these accounts to a single demat account.

However, only a few brokers allow opening only a trading account with them. With most brokers, it is compulsory to open both trading and demat accounts at their firm.

Here, the answer is NO!

As per the rules, a trader is not allowed to open two or more demat accounts with a single stockbroker. You may have multiple trading accounts and link them to a single demat account; however, you cannot have numerous demat accounts at one firm.

Even though it is legal to open multiple demat accounts for a single trader, there are some advantages and disadvantages of the same. Let us have a look at them.

Advantages of Multiple Demat Accounts –

  • Opening multiple demat accounts is advantageous only for traders who are seasoned in equity trading and have the time to maintain multiple demat accounts.

  • Segregate long-term and short-term investments in different accounts

  • Segregate investments based on goals

  • Separate accounts for storing varied types of investments like commodities, mutual funds, shares, F&O, etc.

  • It makes consolidating the investments easy and eliminates confusion

A Disadvantages of multiple demat accounts –

It is not advisable to have multiple demat accounts unless you are a seasoned trader who understands the intricacies and demands of equity investment. If not, you will face a lot of trouble while keeping track of all the accounts. Some of the disadvantages of multiple demat accounts are –

  • 1.You will have to AMC for every demat account –Holding a demat account with a broker attracts Annual Maintenance Charges (AMC). If you hold multiple demat accounts, you will have to pay multiple AMC for maintaining your accounts. This may become cumbersome and a costly affair for people who do not trade regularly or in large amounts. It can also become challenging to keep track of all the charges to be paid to all the different brokers.

  • 2.Tracking different Demat accounts is tiresome –As stressed multiple times, multiple demat accounts is a good option only for traders who are adept at trading in equity investments. They know the intricacies of the market and can keep track of their investments. For others, holding multiple demat accounts can be a tiring process. It is very difficult to maintain a record of all the holdings in different accounts. It is cumbersome to remember to pay charges on ever account, consolidate the holdings of each account, and maintain a proper record of every transaction.

  • 3.Inactivity in a demat account for a specified period can lead to the account getting frozen –As it is difficult to track multiple demat accounts, one of the accounts may get sidelined and remain inactive for a long time. This may result in the account getting frozen by the broker. In the case of multiple accounts, it becomes difficult to update information in every account on time. As a result, you may not receive updates or alerts for freezing of accounts on time. You may also not pay much attention to the account, and it may keep accumulating charges and fines, which you may have to bear the burden later.

Answering the question – “Can a trader open multiple demat accounts in India,” the answer is “Yes, it is legal and possible to open multiple trading accounts in India!” However, a trader needs to carefully evaluate the advantages and disadvantage s of opening multiple demat accounts. Traders who possess a good knowledge of the market and have time to maintain different accounts can open multiple demat accounts. These investors construct specific portfolios and like to have a separate account for each portfolio. While separate accounts do cater to different financial goals and make consolidation easy, it takes a seasoned trader adept at the equity trading and investment to be able to create and maintain different portfolios in multiple demat accounts.

So, you can open multiple demat accounts in India with different brokers. However, it is not advisable if you cannot put in the time and effort to maintain the accounts.