How to Transfer Money From Demat account to Bank Account

How to Transfer Money From Demat account to Bank Account

Transferring funds from your Demat account to your bank account is quick, convenient and involves simple documentation under the existing regulations. It saves you from the hassles of physical share sale receipts and cumbersome paper workflows. From an operational perspective, it is on par with transfers between any two bank accounts.

In this article, we will look at the step-by-step process to transfer funds from your Demat account to bank account seamlessly

What is a Demat account?

A Demat account is like a bank account for securities in place of cash, allowing seamless debit and credit of stocks and other securities. Unlike physical transactions, trades are executed through a linked trading account with a broker. This eliminates risks associated with physical shares, like loss or theft. Demat accounts automate processes such as trade execution, clearing, and settlement. Opening a demat account involves basic documentation and KYC, which can now be done online with minimal manual intervention. To transfer money from Demat account to bank account, follow the specific procedures outlined by your broker. For detailed instructions, refer to the source provided.

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Table of Content

  1. What is a Demat account?
  2. How Demat Account Works?
  3. Steps to How to Transfer Money from Demat Account to Bank Account
  4. Things to keep in mind while transferring funds

How Demat Account Works?

When you purchase or sell a stock, a Depository participant submits a request to the stock exchange via your trading account. If you make a buy request, the stock exchange finds a seller who placed an order to sell the number of shares you want to buy. Once a seller has been identified, the depository instructs the clearance house to debit shares from the seller's Demat account and credit them to you. However, once you sell the shares, the profits are deposited to the trading account associated with your Demat account within T+2 days. Once the funds are in your trading account, you can transfer them to your bank account.

Steps to How to Transfer Money from Demat Account to Bank Account

How to withdraw money from Demat account is one of the common queries. So, here are the steps to transfer money from the Demat account to your bank account.

  1. Access your trading account using the login ID and password provided by the broker.
  2. Select the 'Funds' tab from the menu of available options. 
  3. You'll find two options: Add Funds and Withdraw Funds. 
  4. Click on the Withdraw Funds button. 
  5. The available balance will appear on the screen. 
  6. After you've selected your bank account, enter the amount you want to send. Remember that you cannot withdraw the proceeds until the shares you sold are reflected in your trading account. 
  7. You have to submit your password and/or along with an OTP verification to complete the transaction. 
  8. The amount shall be credited to your bank account within two working days. 

Things to keep in mind while transferring funds

  1. Funds cannot be moved straight from your bank account to your Demat account. Any transfers to your bank account can be made through the trading account, which acts as a bridge between your Demat account and the bank.
  2. Remember that the only money that may be taken out is the proceeds from the sale of the securities.
  3. Remember that your fund limit is not the same as the amount of money you are allowed to move. By lending you money depending on the value of your present assets, brokers provide you with trading leverage. This is not the amount you may transfer, even though it will seem that way on your account.
  4. Brokers accept all popular payment methods, including online transfers from laptops and mobile devices. Furthermore, the process by which these transactions are executed is virtually the same among brokerages.

So can we withdraw money from Demat account?  The answer is Yes, it is simple, quick, and convenient to transfer funds from your Demat account to a bank account and vice versa. To add or withdraw money from your Demat account, simply log in, select the option, enter the required amount, and trade the password. The transfer has begun, and your bank account will be either credited or debited. Additionally, utilising a reliable Share Market App can further enhance your investment security.

FAQs on How to Transfer Money From Demat account to Bank Account

For help, if you have trouble transferring money online, get in touch with your brokerage's customer service. They can assist you in resolving any technological problems or navigating other approaches.

In such a case, confirm the transaction information first. Make quick contact with your brokerage's assistance if the funds still don't appear. They will look into the problem and fix it right away.

The money usually moves from Demat to the bank in a day or two. The precise schedule, however, can change depending on your broker and the processing delays of the banking system.

No, direct transfers from Demat to a bank account are not possible. Funds must be routed through your trading account, acting as an intermediary, for any transactions involving your Demat and bank accounts.

Most of the depository participants do not charge any fee for transferring funds from a Demat account to a bank account. However, you should check it with the broker while opening your Demat account.