How To Transfer Money From Demat Account to Bank Account?
It is no secret that the value of money does not increase on its own. For your wealth to grow, you must save money and invest it in profitable avenues. For decades, one of the most sought after investment avenues that has captivated the interest of investors is the stock market. You can easily transfer funds from your bank account to your trading account to invest in instruments like shares, debentures, exchange traded funds, and mutual funds etc. Alternatively, you can also transfer money from your Demat account to bank account after booking profits or any other withdrawals.
What is a Demat account?
A Demat account is a digital locker or account that holds your securities in electronic form. It is akin to a bank locker that keeps physical assets like cash, jewelry etc. safe. When you purchase any securities from the stock market, whether it is shares, bonds, or debentures, they get credited to your Demat account. Similarly, when you sell stocks, the securities are debited from your Demat account. Simultaneously, your trading account is debited (when you sell stocks) and credited (when you buy stocks). A third type of account is equally important to ensure seamless transactions - bank account.
Here is how a typical buy transaction takes place in the stock market
- Funds are transferred from bank account to trading account
- Once the buy order goes through, the shares are credited to your Demat account
- Simultaneously, funds are debited from your trading account.
- Assuming you sell these shares, the money will then be credited to your trading account. You can easily transfer funds from trading account to your bank account.
How to Transfer Money from Demat Account to Bank Account?
In order to buy and sell securities in the stock market, you must add funds to your trading account. Not only do these funds enable you to carry out seamless investments in the market, but they are also the determinant of your trading margin. If you have, say, Rs 10,000 in your trading account and the margin offered by your broker is 3x, then you can buy and sell securities upto Rs. 30,000. While it is recommended to utilise your trading margin, in the off chance that you are not using the funds kept in your trading account, then it better to transfer it back to your bank account.
Steps on how to transfer money from your Demat account to bank account on m.Stock:
- Login to your m.Stock account
- Select ‘Fund Transfer’ option
- On the subsequent screen, click on ‘Withdraw’. You will be able to see the withdrawable funds
- Select the bank account and enter the amount you wish to withdraw
- Click on ‘withdraw funds’
- Your payout request will be processed within 24 business hours.
Things to Keep in Mind Whilst Transferring Funds from Demat Account to Bank Account
- You can transfer funds from your Demat account to your bank account only to the extent of the funds available in your Demat account.
- Only the funds credited to your Demat account through the sale of securities in the stock market can be transferred back to your bank account.
- The transfer of money from the Demat account to the bank account happens through your trading account.
- The limit of funds that can be transferred to your bank account from your Demat account differs from the fund limit allocated to you. Fund limit signifies the amount that is lent to you, keeping your present Demat holdings in consideration. This amount can be used for dealing in the securities market but cannot be transferred to your bank account.
- It is pivotal to use only safe browsers whilst accessing your Demat and trading account, particularly for fund additions and withdrawals.
Transferring funds from your Demat account to bank account is very easy with m.Stock. The entire process is password protected and safe, leading to minimal risk of fraud or error. However, it is critical that you do not share your m.Stock Demat and trading account login credentials with anyone. In addition to the above, you must not share your trading password, profile password, and one time passwords (OTPs) with anyone. By adhering to safe browsing and using only our official trading platforms, you can transfer funds to and from your Demat account in a matter of seconds. This way, you can carry on buying and selling securities in the stock market in a hassle-free manner.