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What is Pay Later (MTF)?
Have you ever missed a good trading opportunity just because you were low on funds at that moment? If you had an opportunity to Pay Later (MTF - Margin Trading Facility), this would have never happened. Pay Later (MTF) allows you to buy a stock by paying just a fraction of the total transaction value. The balance amount is funded by the broker (such as Angel One). You can avail up to 4x of your buying power via Pay Later (MTF).
Say for instance
Your Account Balance
= ₹25,000
Pay Later (MTF) gives you upto 4X buying power
= ₹1,00,000 (25,000 x 4)
Thus, your enhanced buying capacity is now
= ₹1,25,000Simply put – even though you have only ₹25,000 in your account, you can still trade up to ₹1,25,000. How awesome is that!
What Would You Do with Increased Buying Power?
Increased capacity to trade, affordable interest rates, and super convenient process - Pay Later (MTF) is a real gift for the interested investor. Here is a starter kit to help you get more out of your buying power.
Easy Steps to Avail Pay Later (MTF)
- Log in to the Angel One Mobile App
- Select your Preferred Stock
- Click on ‘Buy’
- Select the Product Type as Pay Later (MTF), enter the quantity, and click ‘Buy’
- Click ‘Confirm’
Pay Later (MTF): Dos and Don’ts
Do's
-
Trade wisely. Opt for Pay Later (MTF) after doing your homework and ensuring that the trade is right for you.
Dont's
-
Don’t ignore any margin shortfall. In case of a margin shortfall, the shares will be squared off 4 trading days after the shortfall has occurred.
-
Don’t forget that Pay Later (MTF) is a kind of loan. Hence, you are liable to pay interest on it. An Interest rate of 0.041% per day (14.99% per annum) is charged on the borrowed amount.
Frequently Asked Questions
FAQs
What is the margin required?
The margin required is the amount you need to pay initially to buy stocks under margin products. Margin amount can be paid either in the form of cash or by pledging your holdings (margin pledge).
What is the interest rate charged for Pay Later (MTF)?
An interest rate of 0.041% per day (14.99% per annum) is charged on the borrowed amount.
How long can I hold the stocks purchased via Pay Later (MTF)?
There is no restriction on the duration of holding stocks under the Margin Trading Facility (MTF). You may maintain your position under the Pay Later (MTF) option for an indefinite period.
When will I start incurring interest charges?
Interest is levied only from the day you have placed an MTF trade, till the day before your position is closed(either due to sell or conversion to delivery).
When would my shares purchased under Pay Later (MTF) be squared off?
- If there is a margin shortfall, shares will be squared off 4 trading days after the shortfall has occurred.
What are the charges for pledging/unpledging shares under Pay Later (MTF)?
When you raise a request to pledge or unpledge your shares, a charge of ₹20/- plus GST is levied per scrip.
How is the Pay Later (MTF) Pledge different from the Margin Pledge?
- Margin Pledge: Margin Pledge means using your existing holdings/portfolio to get an additional limit/margin. You can then use this additional margin to buy more shares.
- Pay Later (MTF) Pledge: As per SEBI guidelines, shares bought under Pay Later (MTF) have to be compulsorily pledged. This is called the Pay Later (MTF) pledge. Unlike the Margin Pledge, you do not get an additional limit against these shares.
Can the Margin Trading Facility be used for trading in F&O, Currency, or Commodity segments?
No. Pay Later (MTF) Facility is applicable only for trading in equity shares.
What is PayLater (MTF) Auto-Pledge?
As per SEBI guidelines all shares purchased using PayLater(MTF) will be automatically pledged after market hours.
How is interest calculated?
- Interest will be charged from the Buy Date until Sell Date – 1 (Day prior to sell date) of your MTF transaction on the borrowed amount, including non-trading days.
- In case of manual Convert to Delivery(CTD) i.e. when you explicitly add funds to convert your MTF position to Delivery, you will be charged interest from Buy Date till CTD date – 1
MTF Disclaimer
Margin Funding as subject to the provisions of SEBI Circular CIR/MRD/DP/54/2017 dated June 13, 2017 and the terms and conditions mentioned in rights and obligations statement issued by the Angel One Ltd.
