Tuesday , September 21 2021

Pro’s and Cons of opening multiple Demat accounts

Stock market trading is no cakewalk that traders can make money out of it! There are dozens of shares, plenty of investment opportunities and chances of making profits. Full-time traders and the ones planning for the same, find it too difficult to maintain a record of all their big and small investments. This intrigued pressure is why the Depository Participants offer multiple Demat Account opening facilities! Yes, most of the traders prefer opening different accounts to organise their share certificates accordingly. Plus, there are a lot of additional benefits of the same. Some critics raise a question about this decision while some believe it is the best thing to do!

But the convenience of trading in the share market differs from one investor to another. Accordingly, the choice of going through multiple Demat Account opening process can also be an individual stand. However, beginners would only be able to make a fair decision if they get to know the implication of this choice. There has to be a detailed classification of the pros and cons of having multiple Demat Accounts. To open Demat Account in multiples, one has to hold conviction about his trading needs.

With the online account opening process, it is not a difficult task to have multiple accounts!

Multiple Demat Account Opening: Know The Right Time

The right time for multiple Demat Account opening processes comes when the traders are ready to diversify their trading portfolio, and each of them should try that! Traders should try different possibilities and classify all their stock holdings in different accounts for better access and arrangement! To experience the benefits and services of different DPs as well, one can open multiple accounts with all his preferred ones.

So, tradesmen can analyse opening various accounts without endangering their regular flow of investment or stocks. Being specific, well-informed and aware of trading choices is essential. And since the Demat Account opening process is free and online, it is not much of a trouble to get a few. But before moving forward with that thought, let us understand the pros and cons of the same.

Pros of Opening Multiple Demat Accounts

  • Multiple Demat Accounts offer clever organisation when it comes to storing all the shares certificates. Traders with diverse investments can dedicate a Demat Account to each type of investment.
  • IPOs (Initial Public Offerings) and certain government securities are not available for every general trader. One with a diverse and impressive trading portfolio is more likely to beat the traders who stick to one.
  • Multiple Demat Account process and maintenance gives a simplified strategy-making process for traders. One can have a detailed yet clear look at all his investments without having to rumble through the papers!
  • After knowing the Demat Account benefits of different options, one has to decide whether he wants to stick to one DP for multiple accounts or he wants to experience variations. With multiple accounts, there is the opportunity to reap the benefits of different service providers!
  • If one chooses to open his Demat Account with a full-time service broker, he gets the service of getting a trading portfolio. This document has a greater significance in the trading industry as it reflects the investment decisions of a trader. Investors must always try to create a diverse portfolio to gain benefits.

Cons of Opening Multiple Demat Accounts

  • Demat Account opening charges are zero as most of the leading DPs offer free services on that front! However, one needs to pay a nominal sum annually as the Account Maintenance Charge (AMC) and transaction costs for dematerialising the certificates. These charges differ from one DP to the other and traders have to make the choice carefully.
  • Stock market investments are not something most traders do as a full-time investment commitment. But multiple accounts demand a lot of dedication and time for managing the Demat transactions and transferring share certificates. So, this time crunch can be a barrier in managing the accounts effectively.
  • Time management can be a serious concern when traders who follow busy schedules open multiple Demat Accounts. Every account will require equal attention and activity. One cannot just store all the certificates in one and then never check it again. So, investors who cannot dedicate a lot of time to these activities should not go for multiple accounts.
  • One has to handle numerous weekly and monthly statements and account maintenance instructions if he opts for multiple account options. Trades who are not good with bookkeeping skills and cannot invest their energy in that should think wisely. And then go with the Demat Account opening process with complete and detailed conviction!

Holding multiple Demat Accounts is a personal decision since every trader has his individuality in the trading market. And just like the investment decisions, this choice must also be an exclusive one, However, considering the advantages of well-maintained and organised account statements, is a one-time shot! So, one should find the best Depository Participant to start the Demat Account opening services.

Please share this news
<div id="taboola-below-article-thumbnails"></div>
<script type="text/javascript">
  window._taboola = window._taboola || [];
    mode: 'thumbnails-a',
    container: 'taboola-below-article-thumbnails',
    placement: 'Below Article Thumbnails',
    target_type: 'mix'