Is Demat Required For SIP?

Atul is a novice mutual fund investor. He has read a few articles in the newspapers and online media regarding the benefits of mutual funds in creating wealth in the long term. This fascinated him towards this investment avenue and he decided to start with a Systematic Investment Plan (SIP) as a first step. One of his colleagues adviced him a convenient way to start with SIP in mutual fund investment and that is by opening a demat account. This according to his colleague is a hassle-free, convenient, easy and paperless way of investing and managing mutual fund holdings. He also added that having a demat account for SIP will help him in having all his investments in a single place making it easier for him to monitor and track his financial performance.

Although the advice of his colleague sounds fine to Atul, he wants a second opinion on the same. In order to help him and others like Atul, we have come up with this article where we will learn about SIP in mutual funds through demat account.

What is a demat account?

Demat account holds the shares and securities in an electronic form. It is just like your bank account that holds your money. With demat account, the transactions in the financial markets can be completed with ease and quickly. By opening a demat account you can invest in multiple avenues like equities, mutual funds, government securities, bonds and exchange-traded funds.

Let us now learn whether demat account is required for SIP.

Is Demat Account Required For SIP?

SIP is a convenient way of investing in mutual funds. SIP in mutual funds can be done even without a demat account. However, with the demat account, doing SIP in mutual funds becomes a simpler task.

A demat account is only required for trading instruments like shares, initial public offer, derivatives, etc. It is not necessary for mutual fund investments of any kind including SIP.

Let us now learn about the benefit of doing SIP through demat account.

Benefit Of Doing SIP Through Demat Account

Demat account is the central place to hold all your investments. By doing SIP through the demat account, you can monitor and hold your investments at a single place. Demat account eases the task of measuring the SIP performance and you can take decisions quickly. All you need to do is just log in to your demat account and monitor all your investments.

Starting SIP with a demat account is certainly beneficial to the investors. If you are looking to start a SIP via a demat account, you can consider opening a demat account with Kotak Securities. They are the number one and most reputed broking firm of India.

By opening demat account with them you will get regular advice from their experts regarding the best mutual funds in the market. This will help you in taking the right decision to start your SIPs from the demat account.