How to Open a Secondary Demat Account in Zerodha

Learn how to open a free secondary demat account in Zerodha, its benefits, share transfer process, charges, and FAQs for smart investing

A simple, step-by-step guide to open a secondary demat account with Zerodha — why it helps, how to transfer shares, charges to expect, and frequently asked questions.

Table of Contents

1. Advantages of a secondary demat account
2. How to open a secondary demat account
3. How to transfer shares between accounts
4. Charges of a secondary demat account
5. Example scenario
6. FAQs
7. What’s next

✔️ Advantages of a secondary demat account

• Efficient tax handling via separate FIFO: FIFO is applied per demat account — moving long-term holdings to a secondary account helps keep short-term trading FIFO calculations separate.
• Portfolio organisation: Secondary holdings don’t appear on Kite (only Console), helping you keep long-term investments out of your active trading screen.
• Prevents impulsive selling: Transfers take 24 hours—this delay reduces panic selling and encourages measured decisions.
• One login: Manage both primary and secondary accounts under a single Zerodha login for easier bookkeeping and tax reporting.

Reminder: Consult a Chartered Accountant (CA) or tax advisor before making tax-related decisions. This guide is educational, not professional tax advice.

🛠️ How to open a secondary demat account

Kite app

1. Tap on your user ID.
2. Tap on Profile → Manage account.
3. Tap the arrow → Demat.
4. Select Secondary and tap Continue.
5. Enter nominee details, confirm the undertaking and tap Continue.
6. Complete In‑Person Verification (IPV) by tapping Capture — ensure your face is clearly visible.
7. Tap Sign Now, enter Aadhaar, tick the undertaking and click Get OTP.
8. Enter the OTP and click Verify OTP. Your account will be processed within 72 working hours.

Kite web / Console

1. Log in to Kite → Click your user ID → Open Console.
2. Go to Account → Demat.
3. Choose Secondary → Continue, add nominee details, accept the undertaking and complete IPV.
4. Sign with Aadhaar e‑sign (Get OTP → Verify). Expect activation within 72 working hours and a TPIN via email.

🔁 How to transfer shares between accounts

1. Tap your user ID → Portfolio.
2. Select the stock → Transfer to secondary demat account.
3. Choose quantity → Continue → Authorise using CDSL TPIN & OTP.

Add beneficiary (only if required)

If the secondary demat isn’t already a beneficiary, CDSL sends a verification email between 3–5 PM on trading days. Follow the link, enter PAN/BO ID, generate OTP and accept. Confirm the transfer by 5 PM and complete SMS OTP verification by 8 PM or restart the process.

Your securities show up in the secondary account within 24 hours after verification. The buy average auto‑updates when you move shares between accounts.

💸 Charges of a secondary demat account

Charge	Amount
Account Maintenance Charges (AMC)	₹300 + 18% GST per account (primary & secondary)
Off‑market transfer charges	₹13 + 18% GST = ₹15.34 per transfer

Important: Having two demat accounts disqualifies you from BSDA benefits — both accounts pay regular AMC even if balances individually are below BSDA limits.

📊 Example scenario

Jan 2024: Buy 100 shares of ABC @ ₹100 (long‑term)
June 2024: Buy 100 shares @ ₹150 (short‑term)
July 2024: Price hits ₹180 — you sell 100 shares.

Without secondary demat

FIFO forces selling the Jan batch (@₹100). Profit = ₹80 × 100 = ₹8,000 → taxed accordingly; long‑term holding gone.

With secondary demat

Move Jan batch (100 @₹100) to secondary account. Sell June batch (100 @₹150) from primary. Profit = ₹30 × 100 = ₹3,000. Long‑term holding preserved; lower tax impact on this sale.

https://support.zerodha.com/category/account-opening/resident-individual/ri-online/articles/open-secondary-demat-account-zerodha#h_75148983470331755676330209

❓ FAQs

Who can open a secondary demat?

Only resident individual accounts can open a secondary demat. NRIs, corporate, partnership or HUF accounts are not eligible.

Can I sell directly from secondary?

No. You must transfer shares to your primary account (24‑hour process) before selling.

Will secondary holdings show on Kite?

No — secondary holdings are visible only on Console.

Do transfers count as taxable events?

No. Transfers between your own primary and secondary demat are off‑market transfers and not taxable events.

Can I use secondary holdings as collateral?

No. Shares in the secondary demat cannot be pledged for margin or collateral.

What is TPIN?

TPIN is a demat account PIN. You’ll receive a TPIN for the secondary account via email once activated. TPINs for primary and secondary accounts are different.

Can I transfer mutual funds or fractional units?

Mutual fund transfers are not currently supported between demat accounts. Fractional units can be transferred.

📈 What’s next?

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This guide is informational. Please consult your CA or tax advisor before making tax-related decisions. — Harthik T