Are you searching for the best demat account for mutual funds in India but feeling confused by the endless options and complicated charges? You’re not alone. With dozens of brokers and banks promising the lowest fees, fastest platforms, and the best customer support, it’s tough to make a confident decision. This guide will cut through the noise, compare the top demat accounts, and help you pick the right one for your mutual fund investments—whether you’re a first-time investor or a seasoned pro. We’ve researched the latest data from broker official websites and leading competitor reviews to ensure you get the most up-to-date and reliable information.
What is a demat account ?
A Demat account (short for “dematerialized account”) is a digital locker where you can store and manage your financial investments, including stocks, bonds, and mutual funds, in electronic form. While it’s widely used for stock trading, its role in mutual fund investing is often misunderstood. Here’s a complete guide on how Demat accounts relate to mutual funds, their benefits, and when you actually need one.
Why Do Some Investors Use a Demat Account for Mutual Funds?
While not required, many investors choose to use a Demat account for their mutual fund holdings because of the following advantages:
- Consolidation: Keep all your investments—stocks, mutual funds, bonds—in one place, making it easier to track and manage your portfolio.
- Convenience: View, buy, and sell mutual funds alongside shares and other securities from a single dashboard.
- Enhanced Security: Digital storage protects your investments from loss, theft, or damage, unlike physical certificates.
- Speed: Transactions (buying, selling, switching funds) are processed quickly, and you can access your holdings instantly online.
- Easy Monitoring: Demat accounts allow you to monitor your entire investment portfolio in real time, simplifying record-keeping.
- Pledging: You can pledge mutual fund units held in a Demat account as collateral for loans.
Top Demat Accounts for Mutual Funds in India 2025
Here’s a quick look at the top demat accounts for mutual funds, based on features, charges, and user experience:
| Broker | Account Opening Fee | AMC (Annual Maintenance) | Mutual Fund Investment | Brokerage Charges (MF) | Unique Features |
|---|---|---|---|---|---|
| Upstox | ₹0 | ₹150 | Direct & Regular | ₹0 | Fast platform, low cost, MF tools |
| Zerodha | ₹0 | ₹300 + GST | Direct Only | ₹0 | User-friendly, educational tools |
| Groww | ₹0 | ₹0 | Direct Only | ₹0 | Zero AMC, simple interface |
| Angel One | ₹0 | ₹240 (1st year free) | Direct & Regular | ₹0 | Research support, mobile app |
| ICICI Direct | ₹0 | ₹700 | Direct & Regular | ₹0 | 3-in-1 account, research reports |
| HDFC Securities | ₹0 | ₹750 | Direct & Regular | ₹0 | Wealth management, advisory |
Detailed Overview of Top Demat Accounts for Mutual Funds
1. Upstox
Introduction:
Upstox is a leading discount broker in India, trusted by millions for its transparent pricing and powerful trading tools. It’s especially popular among young investors and mutual fund enthusiasts.
Why Choose Upstox:
- Zero account opening fee.
- Low AMC of ₹150 per year.
- No brokerage on mutual fund investments.
- Direct and regular mutual fund options.
- Fast, reliable app and web platform.
- Free research tools and curated investment ideas.
- Seamless integration with commodity and equity trading, making Upstox a top Commodity Broker in India (Full-Service Brokers) for those who want to diversify.
Key Features:
- Invest in mutual funds, stocks, commodities, and IPOs from a single account.
- Flat ₹20/order for equity and commodity trades, but ₹0 for mutual funds.
- Smartlists and advanced analytical tools for better investment decisions.
- Quick KYC and paperless account opening.
2. Zerodha
Introduction:
Zerodha is India’s largest discount broker, known for its user-friendly Kite platform and educational resources.
Why Choose Zerodha:
- Zero account opening fee.
- AMC of ₹300 + GST per year.
- Zero brokerage on mutual funds (direct only).
- Excellent educational resources (Varsity).
- Simple, clean interface.
Key Features:
- Coin platform for mutual funds.
- Advanced charting and analysis.
- Trusted by over 1 crore investors.
3. Groww
Introduction:
Groww is a new-age investment platform focused on simplicity and zero-cost investing.
Why Choose Groww:
- Zero account opening fee and zero AMC.
- Invest in direct mutual funds only.
- No brokerage or hidden charges.
- Clean, mobile-first interface.
Key Features:
- Easy onboarding and KYC.
- Simple dashboard to track MF investments.
- No support for regular mutual funds.
4. Angel One
Introduction:
Angel One is a full-service broker with a strong presence in research and advisory.
Why Choose Angel One:
- Zero account opening fee.
- AMC of ₹240 (first year free).
- Invest in both direct and regular mutual funds.
- Comprehensive research and advisory.
Key Features:
- Versatile mobile app.
- Personalized investment ideas.
- Flat ₹20/order for equity trades.
5. ICICI Direct
Introduction:
ICICI Direct is a top bank-based broker, offering a 3-in-1 account (savings, demat, trading).
Why Choose ICICI Direct:
- Zero account opening fee.
- AMC of ₹700 per year.
- Invest in direct and regular mutual funds.
- Extensive research and banking integration.
Key Features:
- 3-in-1 account for seamless fund transfer.
- Strong brand trust and support.
- Higher AMC compared to discount brokers.
6. HDFC Securities
Introduction:
HDFC Securities is another major bank-based broker with a focus on wealth management.
Why Choose HDFC Securities:
- Zero account opening fee.
- AMC of ₹750 per year.
- Access to direct and regular mutual funds.
- Wealth management and advisory services.
Key Features:
- Advanced research tools.
- Seamless integration with HDFC Bank.
- Higher AMC.
Comparison Table: Top Demat Accounts for Mutual Funds
| Broker | Account Opening Fee | AMC (Annual Maintenance) | Mutual Fund Investment | Brokerage Charges (MF) | Unique Features |
|---|---|---|---|---|---|
| Upstox | ₹0 | ₹150 | Direct & Regular | ₹0 | Fast platform, MF tools, commodities |
| Zerodha | ₹0 | ₹300 + GST | Direct Only | ₹0 | User-friendly, educational tools |
| Groww | ₹0 | ₹0 | Direct Only | ₹0 | Zero AMC, simple interface |
| Angel One | ₹0 | ₹240 (1st year free) | Direct & Regular | ₹0 | Research support, mobile app |
| ICICI Direct | ₹0 | ₹700 | Direct & Regular | ₹0 | 3-in-1 account, research reports |
| HDFC Securities | ₹0 | ₹750 | Direct & Regular | ₹0 | Wealth management, advisory |
How Does a Demat Account Work for Mutual Funds?
- When you invest in mutual funds via a Demat account, your mutual fund units are credited to your Demat account in electronic form, just like shares.
- You can buy and redeem mutual fund units through your broker’s trading platform or app.
- All your holdings are visible in a consolidated statement, making it easy to track performance and manage your investments.
How to Choose the Best Demat Account for Mutual Funds
When picking the best demat account for mutual funds, consider these factors:
- Account Opening & AMC: Lower is better for most investors.
- Brokerage Charges: Ensure mutual fund investments are free of brokerage.
- Platform Usability: Look for fast, reliable apps/websites with easy navigation.
- Research Tools: Advanced tools and curated lists help you make better choices.
- Customer Support: Quick, helpful support is crucial if you face issues.
- Investment Options: Some brokers offer only direct mutual funds; others offer both direct and regular.
- Extra Features: Integration with commodities, equities, and IPOs can be useful for diversification.
Frequently Asked Questions (FAQs): Best Demat Account for Mutual Funds
Which demat account is best for mutual funds in India in 2025?
Upstox offers the best combination of low charges, a fast platform, and zero brokerage for mutual funds.
Can I hold other securities in the same demat account?
Yes, you can hold stocks, bonds, ETFs, and mutual funds in the same demat account.
What documents are required to open a demat account?
PAN card, Aadhaar card, bank proof, and a photograph are typically required.
Which broker is best for commodity trading, along with mutual funds?
Upstox is a top Commodity Broker in India (Full-Service Brokers) and supports both mutual fund and commodity trading from a single account.
Do I need a demat account for mutual funds?
You can invest in mutual funds directly through AMC websites, but a demat account offers consolidated tracking and easy switching between different funds and asset classes.
Is there any brokerage on mutual fund investments?
No, leading brokers like Upstox, Zerodha, and Groww charge zero brokerage for mutual funds.
Can I open a demat account online?
Yes, all leading brokers offer 100% online, paperless account opening.
Is Upstox safe for mutual fund investments?
Yes, Upstox is SEBI-registered and follows all regulatory norms, making it a safe choice for mutual funds.
What is AMC, and why does it matter?
AMC (Annual Maintenance Charge) is a yearly fee for maintaining your demat account. Lower AMC means lower ongoing costs.
Can I invest in both direct and regular mutual funds through a demat account?
Yes, brokers like Upstox, ICICI Direct, and Angel One offer both direct and regular mutual funds.
Conclusion
Choosing the best demat account for mutual funds in India is crucial for a smooth investing experience. After comparing all the top options for 2025, Upstox emerges as the clear winner for its zero account opening fee, low AMC, zero brokerage on mutual funds, and advanced investment tools. Whether you are a beginner or an experienced investor, Upstox offers everything you need to start and grow your mutual fund portfolio confidently.
Ready to invest smarter? Open your Upstox demat account today and take the first step toward financial freedom!
