A frequently asked question:
Can two Demat accounts be opened under one name?
The answer is yes. Two or more demat accounts can be opened under one name, but each account should be with a different broker.
For example, if you open your first Demat account with Zerodha, you cannot open a second account with Zerodha once again. You can opt for any other broker like – ICICI Securities, Upstox, HDFC Securities etc.
You can also open three, four or as many Demat accounts as you wish to have.
There are benefits of opening two Demat and Trading accounts:
- You can open one account with a full-service broker (like ICICI Securities) and a second account with a discount broker (like Zerodha). Full-service brokers provide research reports, trading tips etc, but their brokerage charges are high. Most discount brokers do not provide additional value-added-services for free, but their brokerage charges are very low. You can get the best of both worlds.
- One account can be opened for trading purposes, while the other can have long-term investments that are kept aside.
- Having two accounts also helps during times when there are technical issues with one broker. Zerodha is known to face technical issues on days when there is too much market activity – like budget days. On these days, a trader could use his second account.
Can I have Trading and Demat account with different brokers?
Many people do not know the difference between a Trading and Demat account – because they appear to be the same.
Trading account is the platform you use to buy and sell shares. Whereas Demat account is used to store the shares you have purchased for delivery.
For instance, if you buy and sell a share today (intraday trade), it’s done through the trading account – the shares do not get deposited in your Demat account.
However, if you buy a share today and plan to sell it at a later date. The transaction of buying is carried out through the trading account, while the shares are deposited in your demat account.
It is possible to have trading and demat account with different brokers – however, there are restrictions.
It takes one working day for the shares you purchase to reflect in your demat account, so if you have trading and demat account with different brokers – you cannot sell the shares you bought on the previous day.
So even though it is legally allowed, it’s better to have demat and trading account with the same broker.