There are plenty of online brokers that come with different plans. While some are offer only standard benefits, others offer different features and services. Keeping this in mind, plenty of individuals are opting for a demat and trading account to make the most of these benefits. However, experienced investors have started to opt for multiple accounts to get better benefits. Here is all you need to know about opting for multiple account when trading today.
Requirements of opening multiple trading and demat accounts in India
With the stock market becoming more favorable for investment, more and more investors are opting to open multiple demat and trading accounts. But when it comes to opening these multiple accounts, certain criteria must be satisfied. For one, it should be open with different brokers and DP services. You cannot open multiple accounts with the same broker and in the same DP service. Additionally, if the two separate brokers have accounts with the same DP service provider, they will not provide an account to the same person. In such case you need to link both your trading accounts with one DP account. In this case, each broker company is now opening their own DP services, therefore the chances of this occurrence is very low.
What are the advantages and disadvantages of multiple accounts?
When opening multiple demat and trading accounts, you can use specific features of brokers. You can also take advantage of free trading platforms, especially if you make regular transactions on a daily basis. You can take advantage of the margin money with different brokers based on different segments. Additionally, in the occasion that you face a technical failure from the broker’s end on one particular account, you can always switch to the other account and easily hedge the trade. However, while there are plenty of benefits to opening multiple accounts, you will also need to take into account the annual maintenance charges for multiple trading and DP accounts. You will also need to keep track of the different demat and trade account along with the log in details and the tax documents for them.
Mapping multiple trading account with one DP and bank account
You can use one DP account to map multiple trading account. However, when it comes to selling stock in your account, you can only use a POA trading account. At the same time, when it comes to withdrawing or deposit your funds, you can use one bank account to be linked to multiple trading accounts.
As you can see, there are plenty of benefits and disadvantages to this account. You only need to decide the account as per your preferences and affordability expenses. Therefore, the solution here is to open up additional accounts, if only you have a requirement for it. Additionally, you must ensure that these accounts are kept separately.