Instant withdrawal feature

What is the instant withdrawal feature Zerodha is trying to introduce? It was mentioned and not described properly.

Even though the NEFT withdrawal will be available on the same day, the withdrawal may take few hours. Once we introduce instant withdrawal, you’ll be able to withdraw upto 50k immediately. After this, you need not worry about having some emergency funds at your bank account.

So, it will be done from the withdrawable balance or total fund available in the trading account( i.e not accounted for the settlement )?

Withdrawable funds of couse. Its like doing an IMPS compared to NEFT.

NEFT will be soon available 24x7 but it still executes in batches every few hours. IMPS on the otherhand is instant.

do i need to open a new account in hdfc bank to get same day withdraw from zerodha???

Not needed. Post Dec 16th, regardless of the bank account you hold, you will get the payout on the same night.

So . Can i do like this as below ?
I’ll make payin everyday 8 am .
Do intraday trades .
Take payout 4 pm .
And repeat all the above cycle everyday

Awaiting for the reply…

Is this possible?

Check this post
https://support.zerodha.com/category/funds/fund-withdrawal/articles/withdrawal-timeframe

This article doesn’t mentions whether there will be a change in Withdrawal process of paying made during the day. Till now payin made during the day is available for Withdrawal only from next day. Does this process also change and allow withdrawal within the same day of payin made during the day? @Bhuvanesh @siva

Nope, no change.

Of course that’s good feature, but I can’t find any scenario when it can be used. I think it’s not a problem to stand by for a while and wait for your funds.

Hi @Bhuvanesh @siva
Instant Withdrawal Feature already started from today (16th Dec)?

Not instant withdrawal but same day payout, can check the thread from start.

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@siva, compulsery we need instant withdraw facility needed ,we will withdraw our money from indian stock market anytime soon because SEBI is increasing margin day by day ,its not afford to trade without ROI we are forced to move to US market to trade from dubai , Dubai is free trade country , recently i seen in hindu news paper even the cash segment they increase margin for intraday , SEBI is telling to invest in Mutual fund what a bullshut is this , you ZERODHA cannot explain to SEBI , show he thred to them

Institutional investors who treat equity trades as business transactions, like foreign portfolio investors and mutual funds have been exempted from this rule.

“SEBI is telling retail investors to go to mutual funds; direct trading is only for institutional players. One rule for the retail investor and another for institutional investors and foreign portfolio investors does not ensure a level playing field,” a practitioner of SEBI law for over two decades told BusinessLine .

SEBI’s new margin norms, a major entry, exit barrier for retail investors in stock market’

PALAK SHAH Mumbai | Updated on December 16, 2019 Published on December 16, 2019

Experts say SEBI’s new norms are like a pre-paid equity account for retail investors

SEBI’s new guidelines on margin requirement, even for ‘selling of shares,’ will act as a major entry and exit barrier for the retail investor, say experts. The new rule will cause chaos in the share delivery system, which works on the issuance of demat delivery instruction slips, and is largely physical and not digital, they told BusinessLine .

According to experts, maintaining a margin deposit with brokers for merely selling shares, is unheard of globally and could encourage fraud by brokers.

1.5-2.5 per cent margin

SEBI has directed stock brokers to collect an initial margin of between 15-25 per cent, even for simple buying and selling of shares, in the cash segment. So, if a retail investor wants to ‘simply sell shares’ worth Rs 10 lakh, he/she may require to keep between Rs 1.5 lakh to Rs 2.5 lakh as margin deposit with the broker. Alternatively, the investor should maintain a demat account with the broker he or she is trading with so that the broker mark shares for early pay-in. But for safety purposes, most retail investors keep their trading and demat accounts with separate entities so that the brokers do not take undue advantage of shares in their custody. This safety net will now have to be sacrificed. Also, most retail investors transact in the cash market via multiple brokers to cut risk, but they will now be forced to deal with a single entity due to tight margin requirements.

@siva @nithin what is the logic behind processing payin and facilitating Withdrawal only the next day? What hinders withdrawal the very same day at the EOD? What is the process involved? Will Zerodha ever considering improving this system?

I don’t know if you know it, but all payment gateways settle on T+1 day basis with the merchant. So if you transfer funds and buy stocks today, you are actually using our funds (Zerodha’s) for this. The payment gateway settles your fund to us only the next day. So yeah, if you transfer and withdraw, there is an issue.

Also all fund transfers made into the system is reconciled by our audit team. If we send out funds without reconciling, the business takes a risk as funds once transferred in can’t really be gotten back.

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@nithin is it true for IMPS and UPI fund transfer as well? IMPS and UPI mean instant money transfer, no? With now 24x7 NEFT, does the settlement delay still hold true?

Moreover, why does an investor have to wait for 2 days to withdraw the funds to his bank account after say the redemption amount is credited to the Zerodha trading account. Point #2 below:

As I have mentioned in a previous thread, isn’t this waiting period of 2 days a disadvantage of investing MF through Zerodha Coin when compared to MF investment in non-Demat mode?

https://tradingqna.com/t/will-24x7-neft-make-mf-redemption-any-faster/

This applies when you receive credit for selling Equity shares. We follow ‘T’ day billing pattern, which means the day you’ve sold stocks, is the day you will receive a credit to your ledger. The settlement of this happens on T+2 from the Exchange, which means we receive credit for this only on T+2, which is why you can withdraw only on T+2.

Mutual fund credits can be withdrawn the same day, because we credit the ledger on the day we receive it from the Clearing corporation (on the settlement day).

Do fund transfer by means of upi also takes T+1 day for settlement since it’s based on IMPS tech? Therefore it must be immediately be sent in broker’s account. If so then if I do intraday day trades and close all my positions, shouldn’t the remaining Payin amount(after deducting all charges and adjusted for losses if applicable) be available for withdrawal at end of the day?

In case of UPI and IMPS, the settlement of funds happen to us on same day. With PG it takes the next day. 60% of all our transactions (by value) is through PG.

And like Venu said, when you sell shares, the credit happens only on T+2.