Produced by: Mohsin Shaikh
Starting 5 June, Groww began processing all new mutual fund purchases in demat form by default—a structural change that many users only discovered after placing new orders.
Investors now find themselves holding the same scheme in both SoA and demat formats—raising new questions about folio tracking, convenience, and consolidation.
While Groww did notify users via email, the default setting changed without an in-app prompt. Opting to remain in SoA mode now requires an OTP-based override at checkout.
Demat brings benefits like unified portfolio views and simplified updates to personal details, making it a streamlined option for some investors seeking a consolidated interface.
One key trade-off: demat units are generally tied to a single broker’s ecosystem. Unlike SoA, they can’t easily be redeemed or moved via third-party platforms.
Groww supports STPs and redemptions in rupee terms on demat, but SWPs remain unavailable. This could impact users managing monthly withdrawals or retirement flows.
Demat units require interaction with depository portals like CDSL or NSDL for off-platform actions. By contrast, SoA units can be accessed across MF Central, MFU, or directly via AMCs.
Other platforms like Zerodha and Paytm Money also use demat by default. The shift aligns with broader fintech trends, though not all players have moved away from SoA.
Experts advise investors to weigh both formats based on their needs—flexibility versus consolidation—especially in the absence of unified industry direction on default modes.