Groww introduces demat for mutual funds. What does it mean for investors?

Groww, one of India’s leading digital investment platforms, has rolled out a new feature that allows investors to hold mutual fund units in dematerialised (demat) format. The company’s co-founder and COO, Harsh Jain shared on his social media platform linkedin about the new feature.

The post mentioned that over the past year, many users expressed interest in holding mutual funds in demat format and now Groww is excited to announce that this feature is live, bringing investors a unified way to manage all their investments.

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Until now, the mutual fund holdings on Groww platform were maintained in Statement of Account (SoA) format which served investors well, and millions began their mutual fund journey through the platform. Other offerings such as stocks, ETFs, and bonds—all of which are managed in demat format.

Groww said that maintaining updated bank and nominee details across multiple folios in the SoA format had become unnecessarily complex.

According to the investment platform, this move came in response to growing demand from customers for a more streamlined approach and the mutual fund investments on Groww will now default to demat mode after the team has worked hard over the past few months to improve this process.

The investment platform said that the demat option will help investors manage all their investments —mutual funds, stocks, ETFs, and bonds— at one place in a single demat account. Updating bank account details is easier now and the redemptions will go straight to the bank account linked to the customer's Groww profile. In the demat option, multiple nominees can now be added in one go, across all investments.

For those who invest exclusively in mutual funds, the demat format simplifies account management so that details like bank and nominee information are accurate and up-to-date. For investors who prefer to stay with the SoA format, Groww remains one of the few platforms that continues to offer this choice as well, the investment platform said.

“Existing investments will continue to be in SOA format, and there will be an option to move to demat if the customer wants to do so,” Groww said in a blog post.

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According to a blog post by Groww, the benefits of holding mutual funds in demat format includes seamless bank updates, easy nominee management, pledging option, and simplified management.

Using a demat option, investors can easily update bank details, and redemptions go directly to your demat-linked account, can assign multiple nominees to all your mutual funds in a ratio of your choice with just one click, use mutual fund units held in demat form as collateral for trading, and one can consolidate all their investments—mutual funds, stocks, ETFs, and more—into a single demat account, the blog post said.