Published Jun 18, 2026 4 Min Read

Introduction

Demat mode in mutual fund allows you to hold mutual fund units in a demat account, similar to shares and other securities. It is one of the common modes of holding in mutual fund investments and can help you manage multiple investments from a single account.

  • Mutual fund units are credited electronically to your demat account.
  • You need a demat account and a trading account to invest through this mode.
  • The Bajaj Broking website offers access to 4,000+ mutual fund schemes across equity, debt, hybrid, ELSS, thematic categories, and NFOs.
  • SIP and lumpsum investment options are available for most schemes on the platform.
  • KYC is mandatory before investing, as required by SEBI regulations.
  • SIP investments can start from Rs. 100 per month on the platform.

You can begin your mutual fund journey on the Bajaj Broking website by completing KYC, exploring 4,000+ schemes, and starting a SIP from Rs. 100 per month.

What is Demat Mode in mutual fund?

Demat mode in mutual fund refers to holding mutual fund units in electronic form through a demat account. Instead of receiving a separate Statement of Account (SoA) from the fund house, your units are credited to your demat account.

When you invest in a mutual fund, units are allotted based on the applicable NAV (Net Asset Value). NAV is calculated daily after market close based on the fund's assets and liabilities.

In demat mode, your mutual fund units appear alongside other securities such as shares, exchange-traded funds (ETFs), and bonds held in your demat account.

How do mutual funds work in demat mode?

The process is fully online and helps you hold mutual fund units in electronic form through a demat account. The Bajaj Broking website allows you to invest in mutual funds after completing KYC requirements.

  1. Open a demat and trading account with a registered intermediary.
  2. Complete KYC verification using PAN, Aadhaar, and other required documents.
  3. Log in to the investment platform and browse available mutual fund schemes.
  4. Select a mutual fund scheme based on your financial goals and risk appetite.
  5. Choose SIP or lumpsum investment mode and enter the investment amount.
  6. Submit the purchase request and complete the payment process.
  7. Receive mutual fund units electronically in your demat account after allotment.

Demat Mode vs SoA Mode in mutual fund – Key differences

Both demat mode and SoA mode allow you to invest in mutual funds. The main difference is how your units are held and tracked.

FeatureDemat ModeSoA Mode
Holding formatElectronic units in demat accountStatement of Account issued by AMC
Account requirementDemat account requiredNo demat account required
Portfolio viewConsolidated with other securitiesSeparate statements from AMCs
ChargesDemat-related charges may applyUsually no demat maintenance charges
Unit holdingThrough depository systemDirect AMC records

In both modes, the mutual fund scheme remains the same. The AMC continues to manage the fund regardless of how the units are held.

Benefits of holding mutual funds in Demat Mode

Demat mode for mutual funds can make investment tracking easier if you already use a demat account for other investments.

Key benefits

  • Single view of mutual funds, shares, ETFs, and bonds.
  • Electronic record keeping.
  • Reduced paperwork.
  • Easier portfolio monitoring.
  • Centralised investment tracking.

Fund performance, returns, and risk remain linked to the underlying mutual fund scheme and are not affected by the holding mode.

When evaluating risk, always check the SEBI-mandated riskometer, which classifies schemes as Low, Low to Moderate, Moderate, Moderately High, High, or Very High risk.

Who should consider Demat Mode for mutual funds?

Demat mode may be suitable if you already invest in shares, ETFs, or bonds and prefer managing all investments through one account.

You may consider demat mode if:

  • You already maintain a demat account.
  • You want a consolidated investment statement.
  • You prefer electronic records.
  • You actively manage multiple investment products.

If you only invest in mutual funds and do not use a demat account, SoA mode may also be a practical option. The choice depends on your investment preferences and account usage.

Conclusion

Demat mode in mutual fund is a method of holding mutual fund units electronically through a demat account. It offers a consolidated view of your investments and can simplify portfolio tracking if you already use a demat account.

Before choosing between demat mode and SoA mode, consider account requirements, possible charges, and how you prefer to manage your investments. You can explore 4,000+ mutual fund schemes on the Bajaj Broking website and invest through SIP or lumpsum based on your financial goals.

Frequently asked questions

Can I invest in mutual funds through a demat account?

Yes. You can invest in mutual funds through a demat account. In this arrangement, the allotted units are credited electronically to your demat account. On the Bajaj Broking website, you can access 4,000+ mutual fund schemes and invest through SIP or lumpsum after completing mandatory KYC requirements.


Is demat mode mandatory for mutual funds?

No. Demat mode is not mandatory for mutual funds. You can hold mutual fund units either in demat mode or in Statement of Account (SoA) mode. Both options are recognised by the industry, and the fund continues to be managed by the respective AMC regardless of the holding method.


Can I switch from SoA mode to demat mode for existing mutual fund units?

Yes. Many investors can convert existing mutual fund holdings from SoA mode to demat mode by following the procedures specified by the AMC, depository participant, and intermediary. You may need to submit relevant forms and verify account details before the units are transferred.


Are there any charges for holding mutual funds in demat mode?

There may be charges associated with maintaining a demat account, depending on your depository participant. These charges are separate from mutual fund expenses such as the expense ratio, which is set by the AMC and reflected in the scheme's NAV rather than charged directly to you.


What is the best mode of holding mutual funds – demat or SoA?

The best mode depends on your needs. If you already use a demat account for shares and other securities, demat mode can provide a consolidated portfolio view. If you invest only in mutual funds, SoA mode may be sufficient. The Bajaj Broking website supports mutual fund investing while giving you access to multiple scheme categories and investment options.

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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form.

(ii) carry customized/personalized suitability assessment.

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure
: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.