Why Does MFCentral Show SOA & Demat Holdings? How Are They Different?
Mutual fund investors in India often come across two different ways of holding their investments—SOA (Statement of Account) and Demat. When you log into MFCentral, the unified mutual fund servicing platform, you’ll notice that your holdings are displayed under these two categories. But what do they mean, and how are they different?
At DhanLAP, we help investors unlock liquidity against their mutual fund holdings while ensuring they continue to grow their wealth. We unlock liquidity whether you hold the mutual funds in SOA form or demat. Understanding SOA and Demat holdings is crucial, especially if you’re considering a Loan Against Mutual Funds (LAMF). Let’s break it down.
Why Does MFCentral Show SOA & Demat Holdings?
MFCentral is designed to give investors a complete view of their mutual fund portfolio. Since mutual funds can be held in either SOA (Statement of Account) form or Demat form, the platform categorizes them separately.
✅ SOA Holdings
These are mutual fund units held directly with the Asset Management Company (AMC). When you invest in mutual funds, your holdings are recorded by the Registrar and Transfer Agents (RTAs) such as CAMS or KFintech. Investors receive a Statement of Account (SOA) as proof of their holdings.
✅ Demat Holdings
These are mutual fund units held in a Demat account, just like stocks. The holdings are maintained by Depository Participants (DPs) registered with NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited). Investors can buy, sell, and manage their mutual funds through stockbrokers. These schemes are also managed by the RTAs in the backend.
Since both types of holdings exist in the Indian mutual fund system, MFCentral displays them separately to ensure complete transparency and easy tracking for investors.
Key Differences Between SOA & Demat Holdings
| Feature | SOA (Statement of Account) Holdings | Demat Holdings |
|---|---|---|
| Where It Is Held | Directly with the mutual fund AMC and their back offices (RTAs) | In a Demat account with a Depository Participant (NSDL/CDSL) |
| How It Is Tracked | Statement of Account issued by the RTA (CAMS/KFintech) | Holdings are reflected in the Demat account, just like stocks |
| Buying & Selling Process | Transactions are done through AMC, mutual fund platforms, or distributors | Bought and sold via stock exchanges (NSE/BSE) through brokers |
| Charges Involved | No extra charges for maintaining SOA holdings | Annual Demat maintenance charges and transaction fees apply |
| Ease of Pledging for Loan Against Mutual Funds (LAMF) | Easier to pledge and get a loan as units are already recorded with RTAs | Easier to pledge and get a loan. One has to use the Loan Against Shares mechanism |
| Best Suited For | Investors who do not hold stocks or Demat accounts | Investors who prefer all investments in one Demat account |
Which One is Better – SOA or Demat?
It depends on the investor’s preference and financial goals.
✅ SOA Holdings are ideal for:
- Investors who want simplicity and direct dealing with AMCs
- Those who don’t want to pay Demat maintenance charges
✅ Demat Holdings are ideal for:
- Investors who like buying and selling mutual funds on stock exchanges
- Those who want to consolidate all investments (stocks + mutual funds) in one Demat account
- Investors comfortable with brokerage and Demat maintenance charges
Either way, investors can pledge mutual funds for a loan—whether they are held in SOA form or in a Demat account.
Final Thoughts
MFCentral shows both SOA and Demat holdings to give investors a clear view of their portfolio. While SOA holdings offer simplicity and easier loan options, Demat holdings suit those who prefer stock exchange transactions.
Understanding the differences can help investors make smarter decisions—whether it’s for investing, redeeming, or pledging mutual funds for loans.
