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Groww now lets users hold mutual fund investments in demat format for easier management and seamless bank updates. Discover how it works and its benefits.
Groww said that there will be no extra costs for users opting into demat-based holdings.
Groww Demat Mutual Fund: The investing broking app Groww rolled out a feature in June this year, allowing users the option to hold mutual fund investments in demat format, in addition to the traditional AMC folio or Statement of Account (SoA) format.
The change came in response to the recent developments within the mutual fund industry, where starting June 2024, fund houses have restricted redemptions strictly to the bank account linked to each individual folio.
This has made managing multiple folios cumbersome for investors, particularly those with different bank accounts linked to different mutual fund houses.
Thus, Groww brought the feature to offer several convenience to its customers.
Let’s understand comprehensively about how it works, what are benefits and key FAQs.
How Does Demat-Based Mutual Fund Holdings Work?
This option allows users to hold their mutual fund in demat form, bringing parity with other investment options like stocks and ETFs.
It is completely optional for users. Users are free to continue with AMC folio-based holdings and can switch to demat—or back—at any time, based on their preferences.
What’s The Benefits Of Switching To Demat?
Benefits of Holding Mutual Funds in Demat:
1. Seamless Bank Updates: Easily update bank details, and redemptions go directly to your demat-linked account. You don’t have to update the bank details separately for each folio.
2. Easy Nominee Management: Assign multiple nominees to all your mutual funds in a ratio of your choice with just one click.
3. Pledging Option: Use mutual fund units held in demat form as collateral for trading.
4. Simplified Management: Consolidate all your investments—mutual funds, stocks, ETFs, and more—into a single demat account.
Groww said that there will be no extra costs for users opting into demat-based holdings. This includes zero account creation charges, no DP (Depository Participant) charges for redemptions, and no maintenance fees for transferring units from folio to demat.
How to Switch to Demat for Mutual Funds on Groww
Step 1: Open the Groww app and log in
Step 2: Go to the ‘You’ tab (bottom-right)
Step 3: Tap on ‘Settings’ > Mutual Fund Preferences
Step 4: Choose ‘Hold mutual funds in Demat’
Step 5: Confirm with OTP
Key FAQs Addressed
Is demat mandatory?
No. Both new and existing users can opt out and continue with AMC folio holdings.
Will existing holdings shift automatically to demat?
No. This is optional and will require OTP-based consent.
Will I be charged for moving to demat?
No, Groww will not charge users for this service.
Can I redeem mutual funds through other platforms like MF Central if I choose demat?
No. Redemptions will have to be made via the Groww app, using TPIN and OTP or DDPI (if enabled).
Can I still track my external holdings on Groww?
Yes. The platform supports external tracking.
Can demat-held MFs be used for pledge margin?
Yes, this feature is supported in demat but not in SoA format.
About the Author
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the I…Read More
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