Do you Need A Demat Account For Investing In Mutual Funds?


Before the introduction of the internet-based trading system, investors would obtain paper-based certificates for the stocks and other financial assets they purchased. Now, using their Dematerialisation (Demat) accounts, investors can invest electronically with greater safety and convenience as compared to holding physical certificates. 

Electronic trading allows investors to buy, hold, and sell numerous financial assets online, including mutual funds. Though opening a demat account is not necessary to invest in mutual funds, it provides numerous benefits to investors while purchasing mutual funds.

Generally, investors can purchase mutual fund units directly from the mutual fund company. But many investors use an online gateway to select funds after an effective comparison. A demat account makes mutual fund investing more accessible for investors who prefer to manage their portfolios. They can easily redeem fund units online. They do not need assistance from the broker. You just need to log in to your demat account and choose fund house and scheme from the list available as per your risk tolerance capacity. Opening a demat account online for mutual fund investing is also hassle-free. You can invest in any way - Systematic Investment Plan (SIP) or One Time Payment. You need not verify your details, again and again, to invest in different fund houses. 

Read also: What Are Some Stock Broker Defaults That Investors Can Avoid?


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