Why should mutual funds kept in a demat account? What are its benefits?

It is a myth that Mutual Funds needs a demat account. You lose about Rs 350 / year to charges, and also pay a similar amount for “opening charges”. So net net, you incur a few thousand rupees.

3 Reasons why a Mutual Fund investor must avoid demat platforms:

1. The simple math above, i.e. extra cost of few thousand rupees
2. Demat platforms are about transaction and not about high quality advice. If you want a solution that has ability to manage your financial plan, help select funds and get the transaction done, there are better choices. (Disclosure: i am founder of one such: Maxiomwealth  )
3. Mutual Funds are already dematerialised. The Registrar & Transfer Agency and the Mutual Fund Asset Management Company (AMC) already process everything in an electronic form for you.