Zerodha: Difficulty in transferring money between stocks and Mutual funds

Zerodha Coin - Direct MF
1

I know SEBI stopped brokers to use trading account money for buying Mutual funds.

But it’s tedious to buy MFs from bank account and
then getting the money back in bank account.

It’s specially tedious if we want to move money from stocks to MF or from MF to stocks.
In it we we need to do two transfers, one between Trading account and bank and another between bank and mutual fund.

Will there be any solution from zerodha to reduce this complexity ?

2

You can set-up eMandate, this will automatically transfer funds from your bank account to the trading account as per the schedule selected by you. You can check out the process here: How do I set up automatic fund transfers from my bank account to my Zerodha trading account?

Other than this not much can be done.

1 Like
3

Thanks, that’s great.

Does this mean that zerodha will be able to take money out of the bank out by itself?
Can zerodha take money out of bank account even if I haven’t placed any order?

If yes, it seems really risky. Kindly explain.

4

Funds will be transferred to your trading account only as per the schedule and amount set by you. Would suggest you check out this post to know how mandates work: Introducing e-Mandates – Now fund your SIPs automatically – Z-Connect by Zerodha Z-Connect by Zerodha

5

Thanks @ShubhS9.

Just need one clarification… previously when I had the need to swap mutual funds for eg… move money from liquid MF to GILT MF… I would place 2 orders… 1st order to redeem my liquid MF units and 2nd order to Add GILT MF units… all through money in the trading account… My question is that we need to go rhru bank a/c… is there a way to do the same directly ?

6

You can still do this. The only difference is, instead of a trading account, the redemption amount will be directly credited to your bank account and the investment amount too will have to be paid from the bank account.

7

The only caveat is that many times some extra cash is available in the trading account but not in the bank account… so I would have to wait for redemption proceeds to initiate purchases in new MF…