Do You Need Multiple Demat Accounts for Trading & Investment?

Every trader and investor needs a demat account to operate in the stock market. People often lack clarity on whether they can have two or more demat accounts. One can have multiple demat accounts subject to a few conditions. All the demat accounts an individual holds should be linked to his PAN (Permanent Account Number). 

The various demat accounts of an individual should not be with the same depository participant (DP) or the same brokerage house. One can have more than one demat account with the same broker if he holds them jointly with different people. Opening more than one demat account has both advantages and disadvantages. 

A person can keep his shareholdings segregated in multiple demat accounts. He can choose to have separate accounts for his short-term and long-term investments. He can also gain access to the advisory services and investment advisory of multiple brokers by opening more than one demat account. However, an investor should know the charges associated with all the demat accounts. Keeping a demat account inactive for long has its own implications. 

The broker may freeze an unused demat account and the account holder will have to pay additional charges to get the account activated. He may also have to undergo the KYC (Know Your Customer) procedure again.