Mutual Fund Investments at Groww Can Also Be Held in Your Demat Account
We launched Groww in 2016 to make investing simple, transparent and delightful for our customers. Initially, it was just a simple SIP investing in mutual funds. Over time, we kept building more features to provide more tools for investing and advanced options to our customers. Over the last year, we started getting many requests to hold Mutual Funds in Demat format. We did not have this option. And it was inconvenient for customers who move from other platforms and have their Mutual funds already in Demat.
To enhance the experience for our users, we are now also offering Demat to hold your Mutual Fund investments. However, you are free to opt out of demat and continue with AMC Folio (SoA) to hold your Mutual Fund investments.
If you wish to opt out of demat for mutual funds, you can do so easily here.
Existing investments will continue to be in SOA format, and there will be an option to move to demat if the customer wants to do so.
Why Demat?
Starting June 2024, fund houses process mutual fund redemptions only to the bank account linked to the folio. If you had multiple folios with different bank accounts, updating details for each one was a time-consuming and tedious task.
Additionally, for those holding mutual funds in AMC folios, updating nominees has to be done separately for each folio, which can also be a hassle.
Demat simplifies this by consolidating all your investments—mutual funds, stocks, and ETFs—into one account.In the above case, you don’t need to manage bank accounts across folios saving the account management hassle for you.
To address this, Groww will now offer the option to hold mutual funds in demat form, with no extra cost for investors.
Benefits of Holding Mutual Funds in Demat
- Seamless Bank Updates: Easily update bank details, and redemptions go directly to your demat-linked account.
- Easy Nominee Management: Assign multiple nominees to all your mutual funds in a ratio of your choice with just one click.
- Pledging Option: Use mutual fund units held in demat form as collateral for trading.
- Simplified Management: Consolidate all your investments—mutual funds, stocks, ETFs, and more—into a single demat account.
Given the benefits mentioned above and more, many users have requested the option to hold mutual funds in demat format for these reasons and more.
We will slowly start rolling out Demat for new accounts. In case you want to opt for AMC folio, you can do it here anytime. For our existing users, we will start rolling this later and will keep you informed. For early access, please reach out to our customer support at [email protected].
Here are answers to some common questions you might have.
As an existing Groww user, will I have to mandatorily move to demat?
No, moving to demat is not mandatory.
As a new user on Groww, will my mutual fund investments be held in demat?
Yes. However, you can use this link to opt-out.
As an existing user, when will I get access to demat for MFs?
You will be informed over an email. For early access, please reach out to our customer support at [email protected].
If I move to demat, will my existing investments automatically move to demat?
No. It will be optional and only be done after your explicit consent via an OTP. We will begin to provide this service later and shall communicate about the same over email.
Will I incur extra charges for moving my MFs to demat?
No, you will not be levied any charges like account creation and maintenance, DP charges for redemption or transferring holdings from AMC folio to your demat account.
How are my mutual fund units held?
There are two ways to hold mutual fund units:
- Demat Account
- AMC Folio (SoA or Statement of Account - with AMCs)
What is physical folio-based holding?
Your investments are held directly by the fund house in your name under a “AMC folio.”
What is demat-based holding?
Your investments are held electronically in your demat account.
How are my mutual fund investments stored currently when I invest using Groww?
Currently, all your mutual fund investments on Groww are stored in AMC folios (SoA format).
Will I be able to view my holdings on MF Central if I invest through Groww in demat format?
Yes, absolutely.
Will I be able to redeem mutual funds on MF Central or other platforms if I invest through Groww in demat format?
No, redemptions will need to be done through the Groww app, as your mutual funds are held in your demat account. Similar to stocks, you will need to verify your holdings using TPIN and OTP to place a redemption order.
If you have DDPI activated, you will not have to use TPIN and OTP, but redemptions will still only be possible through the Groww app.
Will I still be able to track external holdings on Groww?
Yes, absolutely.
Will I still be able to track Groww holdings (including demat) externally?
Yes, absolutely.
Will my mutual fund investments be eligible for pledge margin on Groww?
Yes, they will be eligible for pledge margin when held in demat format. However, this is not possible with mutual fund investments in electronic folios with AMC.
