India’s largest retail brokerage Zerodha has rolled out a new feature allowing resident individual investors to open a second demat account under the same login credentials. The move is aimed at improving financial planning, optimizing tax liabilities, and helping users segregate long-term holdings from short-term trading positions. The secondary demat account is now accessible via Zerodha Console and is expected to reshape how retail investors manage their equity portfolios.
With over 8 million active users, Zerodha’s latest offering is a response to growing demand for better portfolio management tools and tax-efficient investment strategies. The feature is currently available only to resident individuals and excludes NRIs, corporates, partnerships, and HUF accounts.
🧭 What Is a Secondary Demat Account?
A secondary demat account functions alongside the primary account, creating a separate digital space to park securities. While both accounts are linked to the same PAN and login, they operate independently in terms of holdings and transaction visibility.
| Feature | Primary Demat Account | Secondary Demat Account |
|---|---|---|
| Trading Access via Kite | Yes | No |
| Visibility on Console | Yes | Yes |
| Collateral Margin Usage | Supported | Not Supported |
| TPIN for Transactions | Shared | Separate TPIN issued |
| Annual Maintenance Charges | ₹300 + GST | ₹300 + GST |
| Transfer Charges | Not Applicable | ₹25 + 18% GST per transfer |
The secondary account is designed to insulate long-term investments from daily trading decisions. Securities held in this account will not appear on Zerodha’s trading platform Kite, ensuring that investors maintain discipline and avoid impulsive trades.
📊 Why Investors Are Opting for a Second Demat Account
The introduction of a secondary demat account addresses several pain points for retail investors, especially those juggling long-term investments and short-term trades. It also aligns with SEBI’s broader push for transparency and investor protection.
| Benefit Area | How the Secondary Account Helps |
|---|---|
| Tax Optimization | Improved FIFO tracking for capital gains |
| Portfolio Segregation | Separate long-term holdings from active trades |
| Risk Management | Reduce exposure to a single broker |
| Accounting Flexibility | Simplify ownership records and audit trails |
| Behavioral Discipline | Prevent impulsive selling of long-term assets |
According to SEBI’s January 2025 bulletin, the number of unique PANs with multiple demat accounts surged from 6.18 million in FY17 to 37.3 million in FY24—a 500% increase. Zerodha’s new feature taps into this trend by offering a seamless way to manage multiple accounts under one login.
🔁 Transfer Process and FIFO Management
Investors can transfer shares between their primary and secondary accounts using Zerodha Console. The system automatically updates buy averages and applies FIFO (First-In-First-Out) principles during transfers, ensuring accurate capital gains calculations.
| Transfer Step | Description |
|---|---|
| Initiation | Via Zerodha Console |
| Charges | ₹25 + 18% GST per transfer |
| Buy Average Update | Automatic recalculation |
| FIFO Application | Applied during transfer and sale |
| Sale Execution | Only from primary account via Kite |
To sell securities held in the secondary account, users must first transfer them back to the primary account. This extra step reinforces the purpose of the secondary account as a long-term holding space.
🚫 Limitations and Eligibility
While the feature offers significant advantages, it comes with certain restrictions:
- Only resident individual accounts are eligible
- NRIs, corporates, partnerships, and HUFs cannot open secondary accounts
- No direct trading or collateral margin usage from the secondary account
- Account closure must be done offline
- TPIN for the secondary account is issued separately via email
| Account Type | Eligibility for Secondary Demat |
|---|---|
| Resident Individual | Eligible |
| NRI | Not Eligible |
| Corporate | Not Eligible |
| Partnership Firm | Not Eligible |
| HUF | Not Eligible |
Once activated, users receive a separate TPIN for the secondary account, which can also be generated using the account’s BO ID.
📈 Strategic Implications for Zerodha
Zerodha’s move is not just investor-friendly—it’s also a strategic business decision. By offering a secondary demat account, the brokerage enhances user engagement and generates additional revenue through transfer fees and annual maintenance charges.
| Revenue Stream | Contribution Potential |
|---|---|
| Transfer Charges | ₹25 + GST per transaction |
| Annual Maintenance Fees | ₹300 + GST per account |
| User Retention | Higher engagement via Console |
| Platform Differentiation | Competitive edge over rivals |
As of March 2025, Zerodha is the second-largest broker by active users, trailing Groww. The new feature could help it regain market share by appealing to serious investors seeking better portfolio control.
🧠 Expert Commentary
Financial planners and tax consultants have welcomed the move, citing its potential to simplify capital gains reporting and reduce audit risks. According to Poonam Behura of CNBC TV18:
“The secondary demat account helps investors maintain discipline and optimize taxes. It’s a smart way to separate long-term holdings from short-term trades.”
Industry experts also believe that the feature could encourage more investors to adopt structured investment strategies, especially in volatile markets.
📌 Conclusion
Zerodha’s introduction of a secondary demat account marks a significant evolution in retail investing. By offering a tool that promotes tax efficiency, portfolio discipline, and behavioral control, the brokerage is empowering investors to take a more strategic approach to wealth creation.
While the feature is currently limited to resident individuals and comes with certain restrictions, its long-term impact on investor behavior and platform engagement could be substantial. As more users explore the benefits of dual demat accounts, Zerodha’s innovation may well set a new standard in India’s brokerage ecosystem.
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Disclaimer: This article is based on publicly available platform updates and regulatory data as of August 21, 2025. It is intended for informational purposes only and does not constitute financial advice.
