If you are an online trader, you know by now that to trade, you have to transfer a particular amount from your bank account (where your money resides) to the trading or DEMAT account (where you can execute, buy and sell orders). Transferring funds may take time if these accounts are with different entities, which eats into your precious trading time.
To help make this process seamless and easy for investors, brokers offer what is known as a 3-in-1 account, which essentially provides the benefits of an online trading, Demat, and savings account.
Wondering what is a 3-in-1 Demat account? To help you get more details about the best 3-in-1 Demat account, we've compiled a quick guide on everything you should know about a 3-in-1 account.
What Is a 3-In-1 Demat Account?
The 3-in-1 online Demat and trading account gives you the flexibility to view your portfolio, do trading on both the Bombay stock exchange (BSE) and the National stock exchange (NSE), invest in mutual funds, life insurance, fixed deposits, view share prices, and much more from a single entity. This ensures you do not have to maintain separate accounts for each process.
It also works better than a 2-in-1 account (which includes only a Demat and trading account) or a standalone Demat or trading account. Many leading banks nowadays offer these 3-in-1 Demat accounts to their clients, which consist of a wide range of products, and advisory services but also come with higher annual maintenance charges (AMC), brokerage charges, and account opening charges.
Some discount brokers have collaborated with leading banks to provide similar benefits to their customers, ensuring customers benefit from a banking account and the range of features that online brokerage firms offer.
How to Open a 3-In-1 Demat Account
To invest and trade in the stock market, the trader needs to open a Demat account with a licensed broker or banking entity. The procedure to open an online Demat and trading account is very similar to opening a 3-in-1 account and is extremely simple, hassle-free, and can be done completely online. All you'll be required to do is:
Fill Out the Account Opening Form
There is a single account opening form used to open all the accounts. The form consists of a different KYC form in which all the details of investors should be provided, like PAN card details, Aadhar card details, Bank details, and income tax returns (ITR). A nominee should also be added at the time of opening an account.
Provide Self-Attested Copies of the Required Documents
Depending on the required documents requested by the broker, you will have to provide self-attested copies of your PAN Card, address proof documents (Aadhaar Card/Driving License/Voter ID/Passport), and canceled cheque, passport size photo, and other required documents.
Complete In-Person or Online Verification Process
Next, you will have to complete the certification process for your account. This can be completed in-person or online by simply uploading a video of yourself with your Aadhaar using the IPV link.
Once this process is completed, you will also have to validate it using an OTP that will be shared via SMS and email.
Benefits of a 3-in-1 Online Trading Account
Highly Convenient
In terms of convenience, a 3-in-1 online trading account offers investors a hassle-free process to perform all the required financial actions from a single account.
Invest in a Wide Range of Instruments
Having a 3-in-1 Demat account enables investors to explore multiple financial assets and investment options, such as stocks or equities, mutual funds, IPOs, commodities, currency, futures & options (F&O), insurance, tax services, and others.
Access on Multiple Platforms
The 3-in-1 Demat account can be accessed via web, mobile, or desktop, and some brokerage providers also have on-call support. This ensures that you do not miss out on any opportunity and can perform your trading or other financial actions anywhere.
Safe & Secure
Similar to any trading or brokerage account, a 3-in-1 Demat account is regulated by SEBI and governed by central depositories like the National Securities Depository Limited (NSDL) or the Central Depository Services Ltd (CDSL).
This ensures that all your trades and investments are secure and protected. At the same time, you can even get up-to-date information about your account via auto-generated reports, portfolio tracker, and real-time statements.
No Wait Time or Transfer Fees for Allocating Funds for Your Investments
With a 2-in-1 account or a standalone Demat / trading account, you must transfer funds from your bank account to the trading account before performing any trade or investment-related operations.
Although transferring funds can take time depending on the type of fund transfer selected (IMPS / NEFT / Cheque), the broker or the bank may also charge an extra fee to execute the fund transfer. With a 3-in-1 account, this funds transfer is not required, making the entire process quick and without additional charges.
Takeaway
A 3-in-1 account is where you can store your funds (saving account), buy and sell assets (trading account), and store securities (Demat account).
As we have seen, the greatest benefit of a 3-in-1 Demat account is its seamless transactions to investors. Since the funds, financial assets, and trades are maintained with a single or linked entity, the investor can efficiently perform trades by debiting the amount from the saving account.
Meanwhile, when the financial assets are sold through the trading account, the funds are credited back into the bank account and can be used like a regular or savings account. This makes it hassle-free, easy to use and ideal for long-term investors and traders.