If you are keen to open a demat trading account, you may wonder, “Can I open 2 demat accounts?” The answer is: yes, you can open two demat accounts, but they should be linked to the same permanent account number (PAN).
Indians are allowed to open 2 or more demat accounts by the Securities and Exchange Board of India (SEBI). However, as per the SEBI, if you have multiple demat accounts, they all should be linked to the same PAN.
The central government has allotted a PAN to each citizen of India. It helps the regulators when all the demat accounts of an individual are linked to the same PAN because they can easily track all the investments of that individual, which makes regulation much more transparent and easier.
However, while opening multiple demat accounts, investors need to be mindful of the following things:
Open 2 Demat Accounts With The Same Pan Card And Adhar Card
- a) While you can open multiple demat accounts with one PAN, you can open only one demat account with one broker. You cannot have two or more demat accounts with one broker.
- b) Bear in mind that you have to pay maintenance charges for demat accounts. The more accounts you open, the more you will have to pay.
- c) If you want to trade frequently or even once in a few months, it is advisable to keep at least one demat account operational. If you do not trade for an extremely long period of time, the broker will freeze your account. Per se, it is fine for a demat account to get frozen or deactivated. However, what if you want to suddenly trade on a particular day? In that case, you will have to get the account reactivated by completing the know-your-customer (KYC) process.
- d) Transferring securities from one demat account to another is very easy and hassle-free. To do this, you should fill in the delivery instruction slip and provide it to your broker, who in turn will send it to the depository. Then, the depository will transfer your securities from your one demat account to another account.
- e) If you have more than one demat account, you can link them all to a single trading account. Then, to make a trade, you will not be required to switch from one demat to another. In case, there is a great opportunity to trade and all your demat accounts are linked to one trading account, you will be able to act promptly and make use of that opportunity.
Can you open two demat accounts with one Adhar card?
As per the regulations in India, you do not need an Adhar card to open a demat account. However, PAN is absolutely essential while opening a demat account and you also have to provide proof of address. For providing proof of address, you can provide an Adhar card.
That said, you can also provide your driving license or passport as proof of address. So, the question of whether you can open two demat accounts with one Adhar card is not relevant, as an Adhar card is not mandatory to open a demat trading account.
That said, it is recommended to have an Adhar card while opening a demat account. This is because an Adhar card is proof of identity and address in the country. It is also required for filing income tax returns.
So, to ensure greater transparency in your financial dealings and filing income tax returns, it is a good idea if you provide an Adhar while opening a demat account.
Conclusion
If you want to open demat trading account, the most important document is your PAN. And yes, you can open multiple demat accounts with one PAN card. However, you can have only one demat account with one stockbroker.
The Adhar card is not essential to open a demat account, but you are advised to have an Adhar card while opening a demat account because it is proof of residence and identity.
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