How to transfer money from Demat account to Bank account

In the past, investing in stock market was considered gambling. Markets were considered a money pit. However, India has seen a rise in financial awareness and people are now accepting investing in capital market. You can either access capital markets directly or indirectly via instruments such as mutual fund. You must have a demat account in order to invest directly.

It is impossible to participate directly in capital markets without a demat account. This account is required to manage, monitor and hold securities. An demat account allows you to store and hold securities or shares in either their dematerialised or electronic form. As a trader in detergent soaps you would purchase the soaps directly from the manufacturer and keep them in a warehouse. You will then sell detergent soaps from the warehouse to the retail outlets. The demat account, in capital markets cases, is the place where securities are kept. Although the trading and demat accounts may be different, many people have both accounts with the same broker. This eliminates the distinction between the two accounts. The trading account acts as an interface between the bank account, and the demat account. A trading account allows you to buy and sell securities that are held in your demat account.

How a demat account works

The demat account stores securities, but it doesn't contain any cash. When you sell securities, such as shares and derivatives, the question of how to transfer money from the demat account into a bank account is raised. Brokerages generally offer bundled trading account and demat. All proceeds of the sale are transferred automatically to the linked trading account. It may take up two days for funds to appear in your trading account. This is because the trades are settled on the exchanges which take T+2 days. You can transfer the funds to your registered bank account once you have them in your trading account.

What's a demat account?
Transfer funds from a Demat account to a Bank Account.

Each demat account has a trading account linked to it. This account is linked with a bank account. You must first transfer money from your bank account to your demat account in order to buy or sell stocks. Brokerages now allow fund transfers using any of the major payment methods, thanks to the development of many payment options. Each major brokerage supports operations on multiple platforms, such as mobile, website and tablet. Fund transfer activities can be done across platforms under either the 'Accounts or 'Funds sections. Although the exact steps will vary depending on which broker you use, they are generally similar.

• - Login to yourtrading account, and click on the "Funds" section. Some apps might have an 'Accounts section' instead of a section called 'Funds.
• - When you click on the "Funds" window, you have two options: add funds or withdraw.
• - To transfer money from your demat account into your bank account, click the "withdraw" option. If you wish to add funds to your trading account in order to purchase new securities, you can also choose the 'add money' option.
• - The brokerage will show you information such as the amount you can transfer from your trading account. You can also ask the broker for the amount you wish to transfer. After selling securities, you can only transfer money you have received. Many people mistakenly believe that the total amount displayed on the homepage is the transferable amount.
• - Most brokerages offer some leverage for trading. They display the total limit on their home page. The amount of leverage you have available depends on how much money you add to your trading account, and what securities you hold in the demat account. The transferable amount and the total fund limit are different.
• - You will need to enter the amount you wish to transfer on the page 'Withdraw'. If multiple bank accounts are linked to your trading account, you'll need to select the one you wish to receive the money. After you have completed the necessary details, you will be able to enter your trading password and initiate the transfer. It may take a few minutes or hours depending on which transfer method you choose to credit your bank account with the amount.

Conclusion

The customer interface has been improved, making it easy and straightforward to transfer funds to or from a demat account. Do not let the fund transfer process slow you down. Instead, invest to secure your financial future.