Is money stored in a Demat account?

No. A Demat account holds securities such as stocks, debentures, and exchange-traded funds. Money is managed through the trading account and bank account.

How long does it take to transfer money from a Demat account to a bank account?

After settlement, money can be withdrawn in a few hours or the next working day, depending on the broker and bank.

Can I transfer money from my Demat account to any bank account?

No, usually the money can be transferred only to that bank account which is linked with the trading account.

Do I need both a Demat and a trading account?

Yes, both are needed. A Demat account holds the investments while a trading account helps in buying and selling securities.

Is there any withdrawal limit on fund transfer from Demat account to bank account?

Withdrawal limits may vary depending on the broker. Banks also impose limits on net banking and UPI, and IMPS transactions, both in terms of number and value. IMPS transfers are capped at ₹ 2 lakh per transaction by most banks.

Why is my withdrawable balance ₹0 even after selling shares today?

Your withdrawable balance may be ₹0 even after selling securities since the trade has not been settled. Indian stock exchanges follow a T+1 settlement system, meaning funds will be shifted to your account after the trade date plus one working day.

How long does the actual bank credit take after placing a withdrawal request?

After you request a withdrawal, the funds are typically credited to your registered bank account within 24-48 hours. Requests submitted before the broker's cut-off time (e.g., 4:30 pm) may be processed within 24 hours, while later requests may take up to 48 hours.

Can I withdraw funds from a Demat account to a secondary bank account?

Yes, depending on your broker. Some allow withdrawals to a secondary account after passing a penny-drop verification test, while others restrict withdrawals entirely, only permitting deposits from secondary accounts.

Why is my withdrawable balance less than my total account balance?

Your withdrawable balance may differ from your total balance due to unsettled trades (such as delivery sales awaiting T+1 or T+0 settlement), funds added on the same day, or capital blocked for open F&O margin requirements

Is T+0 settlement available for all stocks?

No. As of 2026, T+0 settlement is optional and available for the top 500 stocks by market capitalisation on a phased basis, subject to broker support. T+1 remains the default settlement cycle for all equity cash trades.

Are there charges for withdrawing money from a Trading account?

Brokerage, STT and applicable DP or AMC charges are deducted before settlement, which can make the withdrawable amount lower than the trade value.

What happens if my transfer request fails?

Check that the registered bank account and IFSC details are correct, confirm the trade has settled, and verify KYC status. If the issue persists, contact the broker's support team.

Does mutual fund redemption follow the same settlement timeline as shares?

No. Mutual fund redemptions settle on a scheme-specific timeline, typically T+1 to T+3, set by the asset management company rather than the stock exchange.

How To Transfer Money From Demat Account To Bank

How to Transfer Money From a Demat Account to Bank Account?

6 min read•Updated on 19th Aug, 2026•by Angel One

A Demat account functions as a virtual locker for your securities. It works alongside a trading account and a bank account to facilitate trade and investment. A Demat account does not hold any cash. To transfer money from a Demat account to a bank account, you must withdraw funds through your linked trading account.

After selling shares, funds settle on a T+1 basis and can be withdrawn directly to your registered bank account. This process.

This article explains the process of transferring money from a Demat account to a bank account.

Key Takeaways

Withdrawals are permitted only to the bank account registered against the trading account.
Brokerage, Securities Transaction Tax (STT), and other charges may reduce the final credited amount. This means that the withdrawable balance can differ from the ledger balance.
To transfer money, you must wait for the stock market shares settlement cycle (usually T+1) before requesting a withdrawal. An optional T+0 (same day) settlement now covers the top 500 stocks by market cap, subject to broker readiness.
Review your broker's withdrawal charges and processing timelines before initiating a transfer.
Profits from selling securities may be eligible for taxation on the basis of their holding period.

How to Transfer Money From Demat Account to Bank Account?

Step 1: Selling of Shares

Choose the stocks that you want to sell and then place a sell order.

After the completion of the transaction, your shares will be deducted from your Demat account.

Step 2: Wait for Settlement Process

After the sale of stocks, the exchange conducts a settlement process.

In India, most equity trades are settled within the T+1 settlement process, which means that your money is available within one business day of the settlement of the trade. For select stocks among the top 500 by market capitalization, an optional T+0 (same day) settlement is available, subject to the broker supporting it.

The money can only be withdrawn after the settlement of your trade.

Note: T+0 is not yet universal across all stocks or brokers.

Step 3: Login to Your Trading Account

After completion of the settlement process, you can log in to your broker’s app or website.

Navigate to the ‘Funds/Balance’ tab.

You will see your withdrawal balance.

Step 4: Request Fund Withdrawal

Select the option ‘Withdraw Funds.’

Enter the required withdrawal amount.

In case you have more than one account, choose the linked bank account.

Confirm the withdrawal process.

Step 5: Deposit Funds into Your Bank Account

After the completion of the withdrawal request, the amount is transferred to your registered bank account.

Depending on your broker and bank, the transfer may take a few hours or up to one working day.

Relation Between Demat Account, Trading Account and Bank Account

Demat, trading, and bank accounts play distinct roles as follows:

1.Demat Account
This account holds your shares, ETFs, and other securities like bonds in electronic form. It does not deal with financial transactions.

2.Trading Account

The trading account functions as a link between your bank account and your Demat account. When you buy securities, the cash flows from your bank account through the trading account for the transaction. The purchased shares are stored in the Demat account. When selling, the securities shift from your Demat account, and cash settles into your trading account.

3.Bank Account

Your registered bank account holds your actual funds. All pay-ins (deposits for trading) and payouts (withdrawals to bank) originate from or land in this verified bank account. The bank account receives dividends and profits from your holdings.

Use only registered bank account: Withdrawals are normally allowed only through the bank account registered against your trading account.

Wait for settlement: You should not assume that your withdrawal can happen immediately after you sell your shares. Individuals should wait for the settlement to be completed.

Maintain KYC details: Make sure that your PAN, Aadhaar, mobile number, email and bank details are updated with your broker.

Withdrawal balance can be different than ledger balance: Due to pledged shares, pending dues, account maintenance charges, and other levies, your withdrawable balance may be less than your ledger balance.

Maintain records: Save transaction confirmations and bank statements for future reference and tax purposes.

Understand tax implications: The profits made from selling shares may be eligible for taxation based on the holding period. Maintain adequate records of your transactions when filing your income tax returns.

Charges That can Reduce Withdrawable Amount

Brokerage fees on the executed sell order.
Securities Transaction Tax (STT), deducted automatically at settlement.
DP (Depository Participant) or AMC charges, where applicable.
Minimum balance or pending dues with broker, which can reduce the amount actually available for withdrawal.

Differences Between Ledger Balance and Withdrawable Balance

A common area of confusion for investors is the difference between the total account balance (ledger balance) and the withdrawable balance.

Parameter	Total Ledger Balance	Withdrawable Balance
Definition	Includes all available funds, including unsettled trade credits and uncleared deposits.	Represents net settled funds eligible for instant payout to your bank account.
Treatment of Unsettled Profits	Yes (reflects immediately post-trade).	No (available only after T+1/T+0 settlement).
Treatment of Same-Day Additions	Yes, the balance is updated immediately after any funds are added.	No (funds added today can only be withdrawn on T+1).
Pledged / Margin Deductions	Not deducted from ledger total.	Automatically deducted to meet open exposure requirements.

What to do if Money Transfer From Demat Account to Bank Account Fails?

The transfer of money from a Demat account to a bank account can fail for various reasons. You may:

Verify the registered bank account and IFSC code are correct and active.
Confirm if the trade has fully settled before resubmitting the request.
Check for a pending KYC re-verification.
Contact the broker's support team if the delay exceeds the standard processing window.

Conclusion

Money never sits inside a Demat account. Selling shares debits the Demat account and credits the connected trading account. Understanding how the Demat, trading and bank accounts work together makes fund withdrawals predictable and helps avoid confusion during the settlement wait.