Earlier, I remember you could set auto-withdrawal of funds available in your trading account as a quarterly settlement. Alternatively, you had an option to choose auto-invest in an overnight mutual fund. During quarterly settlement, it would auto-complete the chosen action for the entire fund available.
Today I noticed that the console → Funds section has changed and there is no option for auto-withdrawal or auto-investment of funds on a quarterly basis. Rather it is manually asking how much you want to invest or withdraw.
Does this mean Zerodha is utilizing our money to their advantage?
@nithin please bring back the auto-withdrawal / auto-invest of the entire fund. Let the user choose for once what he wants to do every quarter and let it happen automatically like good old days. This would restore our faith in Zerodha more so at times when the Karvy case is still fresh in our memory.
These are two separate things. How we settle funds every quarter, either invest in liquid or get it back to bank is still available under your profile. By default it is set to get it back to bank account, unless you change it yourself.
What we have introduced now on Console is giving an option to park funds in an overnight mutual fund which is yielding better than savings bank account returns. There are many clients who withdraw money and park it idle in savings account, we are giving them an option to invest here for better returns.
Okay understood. Thanks for the help. I missed it maybe because I logged in after long to pay attention.
Though with a closer look, I observed that the fund balance for quarter ending on 30 Sep, 2019 was neither transferred back to bank account nor it was invested in liquid fund. I checked my settings under profile -> liquid fund investment and it shows I had chosen to invest the unused funds. I have raised a support ticket with screenshot of fund statement. Let’s see what went wrong there.
Funds don’t necessarily get invested/transferred back on the last day of the calendar quarter. SEBI prescribes that settlement be done once in 90 days.
Settlement can happen in two days - (a) deemed settlement (b) payout of funds/investments into liquidfunds based on the option chosen
(a) SEBI allows brokers to hold back certain sums of money when a client trades (Point 5 of this NSE FAQ), so if you’ve got 4 lacs in your account and have taken a position in Nifty Futures for which margins required is 2 lac, SEBI allows to hold back 2.25 of the margins blocked, so effectively 4.5 lacs can be held back, since your account balance is only 4 lacs, the account gets deemed settled and there’s no case of payout/liquid fund investment in that block of 90 days.
(b) If an account can’t be settled by way of deemed settlement as explained above, the account has to be paid out/funds invested into liquid fund based on the choice of the customer. As I said earlier, it doesn’t happen on 30th Sept, 31st Dec etc. it can happen on any random date.
