Demat account has revolutionized the way in which an individual trades in the stock market. It has made the place a safer, better, and more convenient place to function. But there can be several reasons because of which you might want to close your demat account. These can be pertaining to your personal reasons or because of the unsatisfactory services of your stockbroker. But is it necessary to close your demat account?
In some cases, yes, it becomes very crucial to close your demat account. Let us have a look at the top 5 reasons for closing your demat account.
Best Reason for Closing Demat Account
The stock market has the potential of generating great returns and can help an individual generate not just active but passive income from it as well. And to begin your journey you need a demat account. But there are a lot of people who look to close their demat accounts. Let us quickly have a look at the best reasons for closing your demat account.
- Dormant account- In cases where you don’t use your demat account, you can close it. A dormant demat account will reap you no good and will be an extra burden for you. So, if you are not actively a part of the Indian stock market, it is better that you let go of that demat account.
- Multiple accounts– Sometimes an individual might have more than one demat account due to various reasons. If you are someone who has multiple demat accounts but uses only one, then it is the right time to close the ones that you are not using.
- Unnecessary AMC- The multiple demat accounts can also lead to unnecessary charges. Every stockbroker charges an account maintenance fee from their clients either annually or monthly. Even if you are not using their services, you will still be entitled to pay them AMC charges. So, in these cases, a lot of people can close their demat account.
- Unsatisfactory services- Apart from all these reasons, there can be reasons related to your stockbrokers as well. If you are not satisfied with the services of your stockbroker, you can easily close your demat account.
- Closing of a stockbroker- It is also possible that your stockbroker is getting out of business due to various reasons like fraudulent activities, or the company slipping into a no-profit zone. In this case, you will have to close your demat account.
These were the reasons that can aid your decision of closing your demat account. Before closing your demat account, make sure that you don’t have pending holdings in your account. You can easily transfer these shares to another demat account. So, if you also fall under any of the categories mentioned above, you can easily close your demat account.
Hope this helps and if you have any other questions related to the stock market, you can enter your details below and we will try to answer that as soon as possible.
