Can a resident individual open multiple Demat and trading accounts?
Yes, a resident individual can open multiple Demat and trading accounts in India with the following key points:
- It is completely legal to have multiple Demat accounts, as per SEBI regulations. There is no restriction on the number of demat accounts one can hold.
- The multiple demat accounts must be opened with different brokers or Depository Participants (DPs). Opening multiple accounts with the same broker or DP is not allowed.
- Each demat account must be linked to the same PAN card for tracking investments and compliance.
- You do not necessarily need separate trading accounts for each demat account; one trading account can be linked to multiple demat accounts.
- Holding multiple demat accounts can help segregate investments—for example, one account for long-term investments and another for active trading.
- Each demat account attracts its own charges, including Annual Maintenance Charges (AMC) and account opening fees. These fees apply even if some accounts remain inactive.
- Inactive demat accounts can be frozen and may require fresh KYC verification to reactivate.
- It is important to manage multiple accounts carefully to avoid confusion and ensure proper tracking of your portfolio.
- There are benefits like access to different brokerage services, research, and platforms by maintaining accounts with multiple brokers.
In summary, opening multiple demat and trading accounts is allowed and can be beneficial if managed well, but each comes with separate maintenance costs and compliance requirements.
