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= ₹1,25,000
Simply 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’
- Pledge your MTF Stocks by 9 PM on the day of purchase
What is the Pay Later (MTF) Pledge?
An important step of availing Pay Later (MTF) is completing the Pledge Request. This is a mandatory process introduced by SEBI. When you buy shares under Pay Later (MTF), you have to pledge those shares to continue holding the position. This process must be completed by 9:00 PM on the same day. In case you fail to do so, your shares will be squared off on T+6 day.
Here’s how you can complete your Pay Later (MTF) Pledge Process:
Once your Pay Later (MTF) request is approved, check your email/SMS for communication related to the Pay Later (MTF) Pledge Request Initiated
Click the CDSL link in the Email/SMS (You will be redirected to CDSL’s website)
Enter PAN/Demat account details
Select stocks to pledge
Enter the received OTP to authorise and complete the process
So that’s it: Pay Later (MTF) can transform the way you trade. Just remember a few critical details, and follow the process to fully enjoy this unique facility.
Pay Later (MTF): Dos and Don’ts
Remember to Pledge your shares purchased under Pay Later (MTF) within the stipulated timeline, i.e., before 9:00 PM on the day of purchase.
Trade wisely. Opt for Pay Later (MTF) after doing your homework and ensuring that the trade is right for you.
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 0.049% per day (18% per annum) is charged on the borrowed amount.
Frequently Asked Questions
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 0.049% per day (18% per annum) is charged on the borrowed amount.
How long can I hold the stocks purchased via Pay Later (MTF)?
You can hold your position under Pay Later (MTF) for a maximum of 90 days. Post 90 days, your position will be squared off based on script-wise ageing to the extent of the debit overdue by 90 days.
When will I start incurring interest charges?
Interest is levied from the 2nd day onwards after you place a Pay Later (MTF) trade till the outstanding amount is cleared and/or your position is squared off.
When would my shares purchased under Pay Later (MTF) be squared off?
For shares purchased under Pay Later (MTF), square-off will be triggered in either of the below scenarios:
- You need to pledge the shares purchased under Pay Later (MTF) before 9 PM on the day of purchase. If you fail to do so, your shares will be squared off after 7 trading days.
- If there is a margin shortfall, shares will be squared off 4 trading days after the shortfall has occurred.
What is the deadline to complete the Pay Later (MTF) Pledge Process?
You need to pledge your respective shares by 9 PM on the same day. In case you do not pledge your shares, the same will be squared off on T+7 day.
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.
Will I be allowed to take fresh positions in Margin Trading if I have not pledged my previous positions?
You can take fresh positions in Margin Trading, as long as you are able to provide sufficient Margin.
When will I receive the Pledge Link For my Margin Trading positions taken today?
Once your request for Pay Later (MTF) is approved, you will receive the link from CDSL on the same day. Please check your Email/SMS for communication related to the Pay Later (MTF) Pledge Request Initiated.
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.
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.