- Date : 17/02/2022
- Read: 4 mins
Brokerage accounts are necessary if you are actively trading. Know if you need multiple brokerage accounts for your stock and bonds investments.
A brokerage account is an account that connects your Demat account with your bank account. You need this account to make purchases or trade in the stock market.
Related Link - 6 Things to Know before you Open A Demat Account
Opening a Brokerage Account in India
If you are opening a brokerage account in India, you can choose from multiple options and agencies. Even the banks provide an easy opening of trading accounts. However, the services rendered depend on the brokerage firm you select. It can be a simple bot-assisted service or professional legal advisors providing detailed investment tips. The fee, thus, varies depending on the chosen firm.
There are multiple brokerage accounts in India, but cash and margin accounts are the two most prominent and significant ones. A cash account allows only a purchase limit up to the level of the balance of the account. On the other hand, you can use a margin account to buy securities beyond the balance through a loan.
Multiple Brokerage Account: Is it essential?
There is no restriction in having multiple brokerage accounts. For example, if someone prefers different services provided by various agencies, they can have multiple brokerage accounts.
These accounts for brokerage offer great services, and their offers are quite attractive, especially their discount offers. However, remember, the responsibility increases with more accounts. Hence, you will be spending more time following up with these accounts.
Related Link - 7 Mistakes To Avoid When Choosing Online Stock Brokers
Pros and Cons of having multiple brokerage accounts
- Access to different varieties of services and investment account analysis.
- Segmented portfolio with a variety of brokerage accounts if you have many investments.
- You have the facility to connect multiple brokerage accounts into one demat account.
- You can enjoy brokerage account benefits from different dealers.
- It demands more time to maintain the accounts as you have to use multiple platforms.
- You will be handling multiple passwords. Forgetting that or maintaining it somewhere secured may be troublesome.
- Multiple brokerage accounts can demand different kinds of fees. Hence your maintenance charges might go high.
- If you forget to maintain transactions in multiple accounts, the account might freeze or go inactive. So, You are likely to incur additional costs to revive it.
Single Brokerage Account - Is it actually convenient?
Single brokerage accounts can be a comfort if you have hardly any time to maintain your financials. A single brokerage account becomes an all-in-one-place platform for your investments, which is better. It becomes convenient to monitor your stocks, bonds, and securities transactions.
It will be a single place of reference for all your securities investments.
It helps in easy tracking of total investments at any point of the time.
Make use of all the benefits of the trading accounts. For example, there might be benefits to having a certain level of transactions. Above which you might get some discounts or other incentives.
It takes only a lesser time to maintain.
You can only avail of the services offered by a single brokerage firm. Hence there will be limitations.
You cannot segregate your investment account in the case of single brokerage accounts.
Hence brokerage account benefits are vast in both single and multiple accounts. It is your choice to choose the one that suits you. Your purpose, trade frequency, and the time you can invest can influence this decision.