What Are the Pros and Cons of Opening Multiple Demat Accounts?

Personal Finance

A savings account is a convenient way for you to save money. It gives you easy access to your funds and protects them from mishandling and theft. A Demat account is your electronic savings account for your shares and securities.

Demat accounts have become popular, but very few know how they work. This article highlights everything you need to know about Demat accounts. We also answer the question: can I have multiple Demat accounts? But before we answer this question, let’s get into the basics.

What is a Demat Account?

A demat account is an online savings account for investors and stock market traders. It holds the shares and securities that you buy from trading and investing. They are managed in an electronic format. “Demat” refers to “dematerialized,” meaning not existing in a physical form. 

A demat account makes trading easier for you. A Demat account holds all the investments. It includes ETFs, mutual funds, bonds, government schemes, etc.

The largest benefit of a Demat account is that it gives you an overview of all your investments in one place. Demat accounts are accessible from all over the world.

What are the eligibility criteria for opening a Demat account?

You must be at least 18 years old. Only an Indian citizen or NRI can apply for a Demat account. You have to provide proof for both. The documentation for opening a Demat account is as follows.

  • Identity proof
  • Address proof
  • Income proof
  • Signature on a blank paper
  • Evidence that you have a bank account
  • Passport photograph

What are the different types of demat accounts?

There are three different kinds of demat accounts used in India. You cannot use all three, and each type is for a different category. Based on your location and eligibility, you can open an account.

  1. Regular Demat Accounts

The most commonly used accounts are regular demat accounts. NSDL and CDSL provide these accounts to Indian citizens. These bodies deliver these services through intermediary bodies. These intermediary bodies can be stockbrokers, depository participants, etc. 

  1. Repatriable Demat Accounts

Repatriable accounts are ideal for NRIs who invest in the Indian stock exchange. These Demat accounts can be used for trading using foreign currencies. They function under the supervision of FEMA. 

NRIs need an associated non-resident external bank account to open an account.

  1. Non-Repatriable Demat Accounts

These Demat accounts are for NRIs who want to transfer funds between different countries. A non-repatriable Demat Account requires an extra NRO bank account to transfer money, while a repatriable Demat account does not.

A non-repatriable Demat account helps NRIs who have income sources in India and abroad and face difficulties managing their finances. It also helps them manage Indian and international bank accounts in one place.

Can I open two demat accounts?

Yes, you can open multiple Demat accounts to trade stocks and bonds. There is only one condition: you cannot open many accounts with the same intermediary. For example, if you have an account with ICICI Securities, you cannot open a second account with ICICI. It has to be through a different intermediary.

What are the pros of having many demat accounts?

 You can organise your investments

You might be trading on different platforms with different brokers every day. Opening many accounts allows you to organize your investments. You can use these accounts according to your goals. Opening many accounts also ensures your investment will not overlap.

You receive insights from various brokers

You can keep a record and gain information from several brokers with multiple Demat accounts. It will help you analyze your trading pattern. You can then decide how to approach the brokers to increase your investments. It will help you improve your trading skills. In addition, there is a high chance that the information is free of bias.

You can separate your investments

Suppose you invest money in both long-term investments and short-term investments. So you can open multiple accounts and keep your money separate. You can keep the amount you invest for short-term and long-term goals in different accounts. The separation will help you keep track of your investments and goals.

What are the cons of having multiple demat accounts?

Now that we have discussed the advantages, let us go through some of the cons of opening multiple Demat accounts.

It is tricky and confusing

Managing many demat accounts is not a piece of cake. It is difficult if you lack experience in trading and investing. It will further burden you with issues, such as missed investments, difficulty tracking your investment, etc.

Managing many accounts is expensive

By opening more than one Demat account, you have to bear the extra charges of each account. The charges include maintenance costs, transaction charges, etc. These charges are less if you have only one account for all transactions. The annual maintenance cost on a Demat account is about INR 700 to INR 1000 per account.

Your account cannot be inactive

If you have opened multiple Demat accounts, you also have to make sure that there are periodic transactions in each. If your account does not have a set number of transactions per quarter/year, it will be marked inactive. The process is time-consuming, and keeping track can be difficult.


A Demat account is a very accessible and convenient way to manage your money. Trading and investing are becoming popular. Keeping everything in an electronic format is ideal because you can process the information. In India, bodies like the NSDL and the CSDL provide Demat Accounts to citizens who trade and invest. 

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