Multiple Trading Accounts in India

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First thing in this article we want to make it clear, a person can have more than one trading account in India is legal. Now lets discuss what is the need of managing more than one trading account? What are the advantages and disadvantages to managing Multiple Trading accounts? To be clear, you can have multiple trading account with different financial entities, but not with the same. The Trading account is linked with your PAN Card and Aadhar Number, so you can't have multiple trading accounts with the same broker.

If I have multiple trading accounts, do I need multiple demat accounts?

    No, you can have only one demat account and you can link multiple trading accounts with that. When you buy shares you can send share in the same demat account with any trading account. On selling side, you can sell shares only from the trading account where you have Power of Attorney (POA) mapped. POA is mandatory to debit shares online when you sell the shares.

    With above said, you can have a demat account with your discount broker and you can link your full-service brokers trading account with a discount broker demat account, so in case you invest in an IPO, you can use your Full-Service broker account and after allotment, you can use your discount broker trading account which is your POA account. That way you can invest in an IPO and sell the stocks with the very low brokerage.

What are the positive points a full service broker has over a discount broker in Indian Stock Market?

    A full-service broker is like your one stop shop for all your investment needs right from research to advisory to investment banking to a personal Relationship manager and so on. Some brokers even have banking and all the brokers offer trading and demat Services under one roof. The advantages of staying with a full-service broker are:

    • Investing in Forex, Mutual Funds, IPOs, FDs, Bonds and Insurance.
    • Branch offices and local trading terminals.
    • Portfolio Management
    • Investment Advisory
    • Trading in Stocks, Currency and Commodities
    • Personal Relationship Manager for tips and recommendations
    • Research Reports
    • Life Insurance, Personal Loans and Depository Services.
    • NRI Services
    • Margin Funding and high leverage and limit

    Brokers like ICICI Direct, Kotak Securities, Axis Direct, SBI Securities, HDFC Securities, IDBICapital acts as a 3-in-1 service provider as they offer banking, demat and trading account all under one umbrella.

    Other type of full service brokers like ShareKhan, Angel Broking, Motilal Oswal, Ventura, Bonanza, IIFL, Reliance Securities, Geojit Paribas etc. offer all other services except bank account. They are sometime refer as 2-in-1 full service providers.

What are the positive points a discount broker has over a full service broker?

    The discount brokers offer low and flat fee brokerage and monthly plans. That gives you an instant saving in the brokerage of 80% to 90%. They offer online services across the country. They are rich in advanced technology and tools, and high performance trading platforms for each device. They have strong online support through emails and knowledge-base, FAQs, online feedback. The software usage is free of cost.

    Advantages of Discount Brokers:

    • NO software charges
    • Low Account opening fee for Trading and Demat.
    • Low or no AMC on trading and Demat Account.
    • No minimum brokerage, no hidden fee, no minimum deposit
    • Tools like brokerage calculator, margin and Span calculators
    • Referral Credits
    • Semi and fully automated trading

    Popular discount brokers in India are Zerodha, Upstox(RKSV), ProStocks, SAS Online , Trade Smart Online , 5paisa, SAMCO.

Conclusion

When it comes to choosing a broker, whether it is a traditional firm or a discount broker, there is no perfect choice for every investor. It really depends on your personal needs and preferences, weighing the costs versus the benefits of each broker, and carefully comparing the level of services and features offered. Choose either one of them or choose both, it is up to you.

Last updated on 30th Jul 2019

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FAQs

  1. Why should I have two trading accounts?

    It is in your interest to have more than one trading account. It is advisable to have two trading accounts, one with a full-service broker and other with a discount broker.

    Both the accounts have their own Pros and cons. To take advantage of the positive things of both types of brokers i.e. A full-service broker and a discount broker, one should have accounts with both. Usually, a full-service broker is good in research and market updates, where a discount broker is good in low brokerage model.

    if you already have an account with a full-service broker like most of the investors and traders have, then you can keep your current account and can open one more account with a discount broker.

    Trading account with a full-service broker may come handy to enjoy the extended services like research and analysis, tips and recommendations, investing in IPOs, Mutual funds, Forex FDs, Bonds, and Insurance.

    Thus by keeping both the account you can save brokerage by 70 to 90% in your day to day trading as well as take advantage of all the investment options.

    A second big advantage which we can say is, in case of technical issue with one broker you have the option to hedge the trade with a second account.

    Diversify your portfolio within the brokers, in case one broker is good in one type of service and another in another service you can diversify your portfolio.

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  2. Can I have two Trading Accounts on my name?

    You can have more than one trading account in your name with different brokers. However, you can't have multiple trading accounts with the same broker.

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  3. Is it legal to open multiple trading accounts in India?

    Yes, Its 100% legal to have multiple trading account. The only constraint is you can't open two trading account with the same broker.

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  4. What is the disadvantage with multiple trading accounts?

    Other than manageability and charges there are no disadvantages to have multiple trading accounts.

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User Comments

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3. UK  10/22/2018 4:35:27 PM Reply
I have a Dena Bank (dena laxmi) demat account but I don''t know where to login, I could not find any trading terminal or site of this broker
please tell me any know about this broker dena laxmi, how to buy stocks by this demat account
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2. Mohan  6/5/2018 9:29:49 AM Reply
I want to invest in IPO, What type of broker I should choose?
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2.1. payal  6/5/2018 9:58:15 AM
Hi Mohan -

For IPO investment you must have demat account with any of the brokers and should have access to online banking.
Please read detail article on topsharebroekrs.com

Regards
TSB Support team






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