How to Withdraw Funds From Your Trading Account and Understand Payout Timelines

Key Takeaways

1. You can withdraw funds from your trading account to a bank account that is linked and verified with your broker. 
2. The amount you can withdraw is your withdrawable balance, which may be lower than the total balance shown on your screen.
3. Money from selling stocks generally becomes available for withdrawal only after the settlement, usually on the next trading day (T+1).
4. Payout timelines depend on the time of your request, your broker's processing cycle, bank working days and holidays.
5. Brokers periodically settle unused funds to clients’ registered bank accounts under SEBI’s running account settlement rules. The applicable cycle and any funds retained for outstanding obligations depend on the rules.

You sell some stocks, and expect the money to reach your bank account. However, the amount available for withdrawal may be lower than expected, or the payout may take some time to arrive.

This is a common doubt among new investors. The money moves through a few steps before it reaches you.

This blog explains how to withdraw funds from your trading account, what decides the amount you can withdraw, and how payout timelines work.

What Does It Mean to Withdraw Funds From a Trading Account?

A trading account is used to place trades in stocks, F&O contracts and commodities and expect the money to reach your bank account. However, the amount available for withdrawal may be lower than expected, or the payout may take some time to arrive.

To withdraw funds means sending a payout request to your broker to transfer the available amount  from your trading account to your linked bank account.

The payout is sent to a bank account linked and verified with your broker. If multiple eligible bank accounts are linked, you may select from available Banks and the option may vary from broker to broker.

Total Balance vs Withdrawable Balance

This total balance shown on your screen may not be the amount you can withdraw. Your withdrawable balance shows the funds currently available for transfer to your linked bank account after considering settlement and applicable obligations.

Here are a few reasons why the two may be different:

• Unsettled sale amount: If you sold stocks today, money from a stock sale may not be available for withdrawal until the trade is settled, generally on T+1 day.
• Margin blocked: Money blocked for open F&O or commodity positions is not available for payout.
• Pending charges or obligations: Brokerage, taxes or any amount due for earlier trades along with applicable charges is adjusted first.
• Recent fund additions: Newly added funds may not be available for withdrawal immediately. Check your broker’s rules and the withdrawable balance shown in your account.

Here's a simple way to compare the two:

Steps to Withdraw Funds From Your Trading Account

The screens may differ across platforms, but the process is generally similar:

1. Log in to your trading app or web platform.
2. Go to the funds or user profile section.
3. Check your withdrawable balance.
4. Select the withdrawal option and enter the amount.
5. Confirm the request. The money will be sent to your registered bank account post validation by the broker.

You can track the status of your request from the same section.

Understanding Payout Timelines

When you withdraw funds, a few factors decide how soon the money arrives.

Time of the request

Brokers process payout requests in fixed cycles during the day and differ from broker to broker. A request placed before the cut-off time is generally processed in that cycle, while a later request moves to the next cycle or the next working day. Check your broker’s current payout policy for the applicable timeline.

Settlement of your trades

If you sell stocks, the sale proceeds generally become available for withdrawal after the trade is settled, usually on the next trading day (T+1). For example, if you sell stocks on Monday, the proceeds are generally eligible for withdrawal after settlement on Tuesday, provided there are no other restrictions or outstanding obligations. The actual payout will also depend on your broker’s processing cycle.

Bank working days and holidays

Bank working days and holidays can affect when the money reaches your account. A request placed after the broker’s cut-off time on a Friday may be processed on the next working day. The actual credit time depends on the broker’s processing policy and the bank.

Running Account Settlement: When Your Broker Sends Money Back on Its Own

You may receive unused funds in your linked bank account even if you have not placed a withdrawal request in your trading account.

Under SEBI’s running account settlement rules, brokers periodically return eligible unused funds to clients’ linked bank accounts. Clients who authorise a running account can generally choose a monthly or quarterly settlement cycle. Additional provisions apply to certain clients who have not traded for 30 calendar days.

A broker may retain funds required for outstanding obligations or applicable margin requirements, as permitted under the rules. The broker also provides a statement showing the settlement details and any funds retained.

Common Doubts About Withdrawing Funds

Why can't I withdraw the money from a sale I made today?

The sale proceeds generally become available for withdrawal after settlement, usually on the next trading day (T+1). The amount may still be subject to other obligations or restrictions.

Can I withdraw funds to a different bank account?

Payouts are sent to an eligible bank account linked and verified with your broker. If you want to use another bank account, check your broker’s process for adding and verifying it first.

What if my withdrawal request is delayed?

See if the request was made after the deadline or during holidays. If there is still a delay after the expected duration, get in touch with your broker’s help desk regarding your request.

How mastertrust Helps You Manage Your Funds

With a trading account from mastertrust, you can log in to the trading platform, check your withdrawable balance and place a payout request online. The amount available for withdrawal and the time taken to process your request depend on settlement, applicable obligations and the payout process. 

If you are new to trading, you can read how to trade online using a trading and demat account and learn about demat account charges before you begin.

Final Thoughts

Before you withdraw funds from your trading account, check your withdrawable balance and confirm whether your trades have been settled. Keep your broker’s payout cut-off time, processing policy and bank holidays in mind when planning a withdrawal.

Understanding these factors can help you know what amount is available and when you may receive it in your bank account.

Frequently Asked Questions (FAQ)

1. How do I withdraw funds from my trading account?

Log in to your trading account, open the Funds section and select the Withdraw or Payout option. Check your withdrawable balance, enter the amount and submit the request.

2. How long does it take to receive the money in my bank?

It depends on the time of your request, your broker's processing cycle and bank working days. Requests placed after the cut-off may move to the next working day.

3. Can I withdraw the sale amount on the same day I sell stocks?

Generally, no. The amount becomes withdrawable after settlement on the next trading day.

4. Will my broker return unused money on its own?

Yes, eligible unused funds may be returned automatically under SEBI’s running account settlement rules. The settlement cycle and applicable conditions depend on the rules and your account circumstances.

5. Can I withdraw funds from my mastertrust trading account online?

Yes. You can check your withdrawable balance and place a payout request online through the mastertrust platform.