Demat accounts have become compulsory if you want to buy and sell shares through the recognised stock exchanges in India.
According to guidelines, you cannot buy and sell shares unless you have a demat account, which is opened by a depository participant, through the two recognised depositories in India.
Why Do Investors Open More than One Demat Account?
Many a time investors maybe forced to open more than one demat account. Let's say if an investor had a share certificate of ACC only in the name of himself, then he would be forced to open a demat account only in his name.
Now say he had a share certificate of Reliance Industries in his name and his wife's name. He would be forced to open another demat account in his and his wife's name. This is wny sometimes an investor is forced to open more than one demat account.
At times it may be because of the charges involved. If another Depository Participant is offering charges that are lower you maybe forced to open another account altogether.
These are some reasons why an investor maybe forced to open more than one demat account.
The Worries of Opening More than One Demat Account
It's important to remember that it is not advisable to open more than one demat account for various reasons. One of them is that you would have to pay charges on annual maintenance and of course if there is account opening charges etc.
Apart from this you would have to keep a tab of all the accounts, which is why opening more than one account is always discouraged.