Groww, a popular investment platform in India, now provides the option to hold mutual fund investments in a Demat account. This offers several potential advantages to investors, although some users have expressed confusion regarding the change. As of June 5, 2025, all new mutual fund purchases on Groww are processed in Demat form by default. Existing investments remain unchanged, but users can opt-out of the Demat format if they wish.
Benefits of Holding Mutual Funds in Demat Form
- Simplified Management: A Demat account consolidates all investments, including mutual funds, stocks, and ETFs, into a single account. This simplifies the process of tracking and managing your overall portfolio.
- Seamless Bank Updates: Updating bank details becomes easier, as redemptions are directly credited to the Demat-linked account.
- Easy Nominee Management: Investors can assign multiple nominees to all their mutual funds with a single click, specifying the ratio of their choice.
- Pledging Option: Mutual fund units held in Demat form can be used as collateral for trading.
The Process
Groww offers the option to hold mutual funds in Demat form at no extra cost to investors. For new mutual fund purchases, the Demat format is the default. However, investors can opt-out of the Demat option and continue with the traditional AMC Folio (Statement of Account) method. To opt-out, users may need to use an OTP. Existing investments will continue to be held in the SOA format, with the option to move them to Demat if desired.
Charges
Groww does not levy any extra charges for moving mutual funds to Demat. There are no account creation or maintenance fees, and no DP charges for redemption or transferring holdings from an AMC folio to a Demat account. Groww offers free Demat account opening and zero annual maintenance charges. For trading, Groww charges a flat fee of Rs 20 per order or 0.05% of the trade value, whichever is lower, for Equity Delivery, Equity Intraday, Equity Futures, and Equity Options. There are also zero commissions on direct mutual funds.
Important Considerations
- Redemption Process: If you invest through Groww in Demat format, redemptions must be done through the Groww app. Similar to stocks, you will need to verify your holdings using TPIN and OTP to place a redemption order. However, if you have a Demat Debit and Pledge Instruction (DDPI) activated, you will not need to use TPIN and OTP.
- User Experience: Some users have reported confusion regarding Groww's shift to Demat mode for mutual fund investments. It's essential to understand the implications and benefits before making a decision.
Groww Demat Account: Additional Features
- User-Friendly Interface: Groww is known for its user-friendly platform, making it accessible to both new and experienced investors.
- Wide Range of Investment Options: Groww offers a wide array of investment options, including stocks, mutual funds, IPOs, and more.
- Educational Resources: Groww provides educational resources to help investors make informed decisions.
- Portfolio Tracking and Analytics: The platform offers tools to track portfolio performance and analyze investment decisions.
