Taking learning from yesterday’s market volatility, and how we were unable to add funds during that crisis period (other sites also crashed and it was not just Zerodha), I want to keep say 1 or 2 lakh in Zerodha forever to be used for such emergency situations where I don’t have to wait to add funds into my account during such crisis period.
But at the same time, I don’t want that money to stay idle. The minimum I expect it to give a return of a savings account i.e. 4% p.a.
What would be the best strategy to keep that emergency safe fund in Zerodha which can be utilized in such critical cases? After using money from this corpus, at the end of the day, I would refill the utilized amount back. So to always maintain this 1-2 lakh emergency fund in my account.
You can buy debt bonds which pays out interest monthly. When you need money sell them. instantly; you will get money in your dmat account. Buy it again when you are able to transfer money.
Ok. Now let say I have bought Liquidbees worth Rs 1 lakh. When needed, do I have to sell the liquidbees first and then buy the needed script?
Is there a way to get away from this extra transaction? What if I pledge the Liquidbees? Will it be considered as margin for CNC order also? I read that there is a 10% haircut for Liquidbees. So for 1 Lakh, margin = Rs 90k. Can I now buy worth Rs 90k with this margin?
Please note that I already have funds in my bank account so immediately or after the market closes, I will add funds to the zerodha a/c = the transacted amount used from the pledged margin i.e. refilling it.
I just want the process to be friction-less during market hours, having buying power how 3-in-1 accounts provide a seamless experience. So I don’t have to worry about adding funds during market hours or sell liquidbees first and then execute buy script order. I don’t want to lose time in intermediary transactions and so would keep funds in Liquidbees which is not an idle money.
Did you understand my requirement? Now, if you can guide me in detail.
Again it involves an additional sell action before I buy what I want to.
Is there no way to make this friction-less without intermediatory sell to have margin?
@nithin@Bhuvan what about upcoming LAS feature, will the pledged security act as margin so I can buy that much value and will i be able to repay it back on the same day itself so I won’t have to pay any interest?
All I need is a friction-less way to create a margin that I can use without any intermediatory sell action to realise it as cash in order to buy something else.
How exactly will it work? Allow me to explain again, what I need is:-
I park some funds say 1-2 L in Zerodha which do not sit idle and at least give a return, kind of a savings bank account i.e. 4% p.a Not asking for much. This fund acts as margin.
When required, I don’t have to “sell first” like how it is done with liquidbees to realise it as cash to execute a buy order. By not having this “sell first” intermediary step, would save time and you won’t miss an opportunity.
Once the margin is used, I will refill it by transferring money from my bank account to zerodha. So it would not attract any interest. There is no way I can default because the margin is like a debit card and not a credit card. It’s like pre-paid.
Something like this would help all of us.
Also, this would help in switching Mutual Funds with same day NAV.
@rupeshmandal the problem is in ur point 1. Zerodha can by no means accept prepaid money and give an interest. Only a full fledged bank based broker can do that , bcos the money is parked in authorized savings account. In fact i think every quarter Zerodha has to clear out fund balances.
The best option would be for Zerodha to offer interest-earning accounts (like a bank). However, it will require RBI nod and licensing - lengthy process
LiquidBees and other debt fund investments hit money supply due to longer settlement cycles. Quick and easy option will be for Zerodha to make the proceeds from sale of such holdings available in trader’s account instantly.
