What Groww's demat switch means for your MF portfolio

Demat holdings do offer some benefits, but also limit platform flexibility, ease of transactions

- Sashind Ningthoukhongjam

Groww has changed how it handles mutual fund (MF) investments—and in the process, left many users confused. Since 5 June, all new mutual fund purchases on India's largest investment platform are being processed in demat form by default, instead of the statement of account (SoA) format most investors are used to. Existing investments, including ongoing SIPs, remain unchanged, but going forward, users will need to fill out a form to opt-out using OTP, if they want to continue in SoA mode. While Groww notified users via email, many seem to have missed it—learning about it only when their new SIPs began showing up in demat.

"You must have basic pop-up option for investor permission before taking demat mode...Now, most will have two folios for each fund," one user wrote on X. The change has triggered a wave of user complaints—not because demat is worse, but due to the lack of upfront consent, and the added hassle of managing mutual funds across two formats. Some investors now find themselves holding the same scheme in two different modes, complicating portfolio tracking and transactions.

Yet, demat holdings also bring their own conveniences. Here's a breakdown of what's changing, how it affects investors, and what to weigh before choosing between demat and SoA.

Change and impact Until now, mutual funds bought via Groww were held in SoA form by default. In this format, units are stored with the registrar and transfer agents (RTAs) appointed by fund houses, and investors can access them through multiple portals like MF Central, MF Utilities (MFU), or directly with asset management companies (AMCs).