Can I Open Multiple Demat Accounts In India? Is it Legal?

I have written multiple articles about demat accounts but one common question I get is “Can I open multiple demat accounts in India?” and whether it is legal to have two or more demat accounts.

This doubt normally comes to their mind when they get dissatisfied with their current broker and want to open account with another broker.

It is perfectly OK to open multiple demat accounts in India and also it is legally accepted.

In this post I will cover what are the advantages and disadvantages that you may have by opening multiple demat accounts.

Can I Open Multiple Demat Accounts In India?

Yes, as it is acceptable to open multiple savings bank accounts, opening multiple demat accounts is legally allowed. One can open as many demat accounts with different brokers as he wish and there is not problem.

I have demat account with Zerodha, Upstox and also Sharekhan. The Sharekhan account was opened in 2006. And I opened Zerodha account in 2012. As you can see, it is possible to open multiple demat accounts in India.

The reason being, when you open the demat account, the broker will ask for your PAN number. Without PAN number, stock broker will not open demat account and hence it is mandatory.

Now even if you open two or more demat accounts, all the accounts are mapped to a common PAN number. Hence it is legally acceptable to open multiple demat account in India.

However, you can not open two demat accounts with a same stock broker.

Pros And Cons of Opening Multiple Demat Accounts In India.

Now as we know that you can open more than one demat account in India, lets see what are the benefits and drawbacks of opening different demat accounts.

Advantages of Having Multiple Demat Accounts:

You may wish to segregate your long term investment holdings with short term trading.
You can use one account for day/swing trading which will have frequent movement of shares to and from the account. Whereas for long term holding, you can another account and hence accounting becomes easy.
You may want to reduce the broker risk – For example, a stock broker app may be down due to technical issues and you want to place an order urgently. In this case, you can use service of another broker

Apart from these, there are no major benefits of opening more number of demat accounts. You just get to understand and compare the service and products of two different brokers.

Disadvantages of Having Multiple Demat Accounts:

It is expensive to maintain multiple demat accounts. Each stock broker will charge for maintaining your demat account and it is called Annual Maintenance Charges (AMC) charges.
The AMC charges varies from broker but almost all are in multiple of hundreds. So to have many demat accounts, you need to shell out extra charges. For example, Zerodha and Upstox charges Rs300 and ICICI Direct charges Rs600.
Your demat account can become dormant. If you dont use your demat account for very long time, it will become dormant. You may have to redo your KYC before using it further. But remember, you still have to pay the AMC charges even the demat account is dormant.
Keeping track of various accounts is cumbersome. It is possible that you make mistakes because of this. Also you need to install different apps for each broker on your mobile.
You need to remember login credentials like password , TPIN etc for each account.

Can I Open Multiple Trading Accounts In India?

Trading account is different from demat account. I have written different post on difference between a demat account and a trading account.

It is possible to link two different trading accounts with a same demat account. But nowadays brokers are not allowing to open only trading account with them. They insist upon opening 2-in-1 account, that is both trading and demat account with them only.

Opening Multiple Demat Accounts In India – Final Thoughts

Opening two or more demat accounts is advised only if you have clear about the use of each account. Dont open the account just because some broker is providing some offer. More often these offers comes with hidden clauses and they will make sure they recover the charges later through some means.

And dont open extra demat account just because you fear that your investments are not safe with one broker. Dont worry, your shares are stored with depositories like NSDL and CDSL and not with the broker. Only the funds that you keep in trading account is depend upon broker. You loose only that fund which you have kept in the trading account.

For this I advice you to open account only with the broker who has zero debt and more number of customers. I trade with Zerodha and they are debt free and also No.1 stock broker of India. I have been using them since 2012 and not faced any issues.

You can visit their website by using below button.

To round up, we have answered the question ” Is it legal to open multiple demat account in India?”. The answer is yes, you can open more than one demat account.

But we also explained what are the disadvantages of having multiple demat account. Please go ahead if you think it is more beneficial to have two or more demat accounts.

Frequently Asked Questions (FAQs)

Q) How many demat accounts one person can open with one PAN card?

Answer : One person can open any numbers of demat accounts with one PAN card. However it is not legal to have more than one PAN card in India

Q) Can i have 2 demat accounts linked to the same bank account?

Answer : Yes, one can have more then 2 demat accounts linked to same bank account. All the funds processed will be credited to the same bank account. Funds can also be transferred to trading account linked to any of the demat account of his choice.

Q) Can i open 2 demat account with same mobile number?

Answer : Yes, one can have more then 2 demat accounts linked to same mobile number. However, one can not use the same mobile number twice with the same stock broker. It can be used with another stock broker.

Q) Can i open 2 demat account with same stock broker?

Answer : No, one can not open two demat account with the same stock broker like Zerodha and Upstox. All the clients of each stock brokers have unique customer IDs and each of them linked to the PAN number. Hence it is not possible to have two demat account with same broker.

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