Holding a demat account is the primary requirement to transact in the Indian stock market. Altough demat account opening has numerous benefits, there are also many myths associated with it. In this article, we will bust some of the common myths related to a demat account.
Busting Myths About Demat Account
- You Cannot Open Multiple Demat Account
It is a common belief that you cannot open multiple demat accounts. However, this is not true. A single person can open multiple demat accounts with different brokers. One must know that his PAN card is the unique identifier and is linked to the demat account. To put it in a simple way, you can open multiple demat accounts with a single PAN card. When the Securities and Exchange Board of India (SEBI) wishes to track your trades, it is done through your PAN card identity and not with the trading or demat account.
- Demat Account Attracts Opening Charges
Another myth that is common among the people is that the demat account attracts opening charges. Again, this is not true because as per the guidelines of Securities and Exchange Board of India, investors are not required to pay any account opening charges except the statutory charges. Therefore, you can open a free demat account.
- Only One Account Holder Per Demat Account
An individual can open a demat account in his name as a single holder account or have a joint holder account. The maximum account holders in a demat account can be three comprising of one main holder and two joint holders.
- Can Change Account Holders Name In The Demat Account
As per the guidelines of Securities and Exchange Board of India (SEBI), after the opening of demat account, no addition, deletion or modification in the name of the account holders is allowed.
- Cannot Have NIL Balance
It is the wrong perception that the demat account must have an account balance to continue its functioning. However, this is not true. A demat account is operational even when the account balance is NIL. Therefore, you are allowed to have zero balance in the demat account.
The above mentioned are a few myths that most of the individuals have in their mind. If you want to open a demat account, you can contact Kotak Securities for a hassle-free experience in the stock market.