HUF Demat Account | Eligibility, Documents & How to Open

Key Takeaways 

• A Hindu Undivided Family can invest together under a single PAN with a HUF Demat Account, allowing for tax planning as a distinct entity from individuals.
   
• Check the process before you begin, as different brokers have different online HUF Demat account opening procedures. Some require courier submission, while others are entirely digital.
   
• Charges vary widely. For example, a broker charges ₹500 for opening an account and ₹75 + GST for quarterly AMC.

“Your whole family can invest using just one account! I was confused too when I first heard this, but once I opened a HUF demat account myself, I understood how it actually works.”

The Karta makes investments on behalf of family members in a HUF Demat Account, which functions as a shared investment account. I found that the account functions under the HUF's PAN and is completely managed by the Karta on behalf of all co-parceners when I opened a HUF demat account for my family. 

When I invested ₹5,00,000 through “Sharma HUF,” I observed that all gains, holdings, and transactions remained under the HUF's demat account and were never combined with the demats of any individual members.

This blog explains how to open HUF Demat account online, the steps in HUF Demat account opening, eligibility rules, required documents, and the charges you should expect. 

Eligibility Criteria to Open HUF Bank Demat Account 

Each broker's unique HUF onboarding requirements in advance help avoid rejection and save time. The table below shows the key eligibility criteria for different brokers:

I can decide which broker best fits my records, preferred method of verification, and expected processing time after comparing these factors. This comparison makes it easier to select the most suitable option for opening my HUF demat account.

Required Documents for HUF Bank Demat Account 

These are the documents brokers require from both the HUF and the Karta that make opening a HUF demat account easy:

These documents allow the broker to quickly activate the account by confirming the HUF's credibility and the Karta's authority.

How to Open an HUF Bank Demat Account? 

I made this step-by-step comparison because different brokers support different modes, and selecting the appropriate one speeds up account opening:

I must accurately complete the KYC for the broker to successfully activate my HUF demat, whether I choose online or offline.

Bonus Tip: Many brokers have recently started offering fully digital HUF demat account onboarding, which was earlier available only through offline paperwork. This makes huf demat account opening online much faster for families. You can check an example of this new digital option on Dhan’s official page. 

HUF Bank Demat Account Charges 

I looked at official charges to see what I might pay when opening and keeping a HUF demat account because fees differ between brokers.

I can select a broker that meets my budget without sacrificing necessary services by carefully examining these charges. This helps me avoid unexpected costs, compare long-term value, and choose a demat account that suits my trading needs comfortably.

Conclusion 

A Hindu Undivided Family can invest under a single entity with an HUF demat account, which facilitates joint ownership and tax planning. You need to verify your eligibility, document list, online HUF Demat account opening instructions, and broker fees. Your family's investments are simplified once set up.

FAQs Related to HUF Bank Demat Account 

1. Can I invest in a HUF demat account using my individual bank account? How will LTCG and STCG be taxed?

Funds for a HUF demat account should ideally come from the HUF’s bank account. If you use your individual bank account, treat it as a capital contribution to the HUF to avoid confusion. LTCG and STCG will be taxed under the HUF’s PAN, not your personal PAN.

2. How many nominees can the Karta add to a HUF demat account?

A HUF demat account can have up to three nominees, similar to individual demat accounts. The nominees receive the securities only after the HUF legally ceases to exist.

3. Can a HUF demat account continue after the death of the Karta?

Yes. After the Karta’s death, the next senior-most coparcener becomes the new Karta. The demat account continues under the HUF, but the broker will ask for updated Karta documents and declarations.

4. Which is the best broker for a HUF demat account for long-term investing?

Brokers like Zerodha, Groww, and Kotak Securities offer stable platforms and clear HUF processes for long-term investing. Zerodha is preferred for low charges, while Kotak Securities offers strong research features. Groww is easy for HUF demat account opening online.

5. Can a HUF demat account invest in IPOs?

Yes. A HUF demat account can apply for IPOs using the HUF PAN, as long as the HUF has an active demat and trading account. The application must be made from the HUF bank account, and allotment will also reflect under the HUF’s demat account.
 

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‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.