FD as collateral

I heard that we can invest money (for ex 5Lakhs) in third party FD with any bank and we can use the money as collateral for my F&O trading with a stock broker. How secure is my money with Bank? Please shed some light on this

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Please check this thread.

Thank you. However this thread doesn’t talk about the insecurities/risks we have with third party FD. The basic queries are:

  1. If the FD matures in a year and if I don’t have any outstanding amount to be paid to broker, can I liquidate FD (including returns from FD) without any issues.

  2. As an investor, do I carry any disadvantages of having collateral as FD rather than MFs apart from the returns?

Hi Ashok,

Please check the thread, Where Nitin has mentioned that FD as a collateral is not accepted in Zerodha.

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To my understanding FD to be made is to NSCCL/Zerodha so its not in broker name basically its clearing house name slash broker …correct me if I am wrong …what is the nightmare in that?

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The only Broker which accept FD as Margin of NSE F&O is Globe Capital Limited .
conditions are as follows

  1. Minimum FDR should be Rs.500000
  2. Deposit your fund in your trading a/c and send mail request for making FDR (Amount) (Tenure)
    just two days process.
    then you can use full 100% amount as margin.
    Interest accrued will be credited on 31st March of every year after deductin TDS.

There are other brokers as well. min ticket size is however 25 lakhs. Eg Motilal Oswal and I believe even 5 paisa.

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