Ways to Withdraw Your Funds Out of Your Trading Account
Who is not fascinated by the idea of withdrawing money after investing? After all, most investors invest for the sole reason of withdrawing their money later. In recent years, capital market investments have become popular for first-time and seasoned investors. Especially for investors eyeing high returns, the mutual funds' industry has aided such investors in indirectly investing their money in the stock market and creating their pool of wealth.
However, anyone interested in investment needs to equip themselves with more than ways to withdraw the funds. The withdrawal of funds comes at a very later stage. So let us delve deeper into some interesting facts about trading accounts. Eventually, we will learn how to withdraw funds from trading accounts. So, keep reading until the end.
What Is a Trading Account?
Everyone is familiar with bank accounts. Right? Similar to the concept of bank accounts that store your money, trading accounts are accounts that hold your shares, bonds, stocks, mutual funds, and other securities in digitized or electronic forms. Trading accounts, simply put, are like the warehouse where all investments are stocked. With the help of trading accounts, one can even track and monitor the progress of their assets to make smarter trading decisions.
As per the SEBI's guidelines of 1996, opening a Demat account is mandatory to buy or sell shares and securities. Thus, to buy and sell shares and securities in a Demat account, one must also open a trading account. Demat accounts are dematerialized accounts that enable faster, safer, and more seamless transactions. A trading account is technically the bridge between a Demat account and a bank account.
Many investors might still wonder if they need to open a Demat account and a trading account to kickstart their investment journey. The answer is:
Well, it depends!
If someone is interested merely in trading in the future, they do not need to open a Demat account. Similarly, for those who have applied for an Initial Public Offering or IPO and wish to keep or hold the shares, a Demat account is all they need. However, if they want to sell the shares, then a trading account is a requirement. Technically, you need to have both Demat and trading accounts to trade in the form of equities in the stock market.
How Can I Withdraw Funds From the Trading Account?
Now that we have provided enough about trading accounts let us answer the question that everyone is looking for an answer to in this blog.
With everything running in the digital mode, withdrawal of funds is a relatively simple process and can be done through a smartphone, laptop, or tablet. Almost all brokerage houses follow similar policies. Thus regardless of the selected broker, one can follow the following instructions for withdrawing funds from the trading account to one's bank account.
- Log into the trading account that is associated with one's Demat account.
- Go to the funds or accounts and click on the section.
- Either two choices will appear: adding funds or withdrawing funds.
- Go to ''Withdrawal Request' and click on it to transfer money from the trading account to the provided bank account.
- The total balance will be shown to the user. The system will then inquire about the amount of money to be withdrawn. Select either 'securities or commodities.' Remember that one can pass the funds earned after selling securities in one's Demat account.
- Depending upon the brokerage house, a cap on the withdrawal of funds can exist. The fund cap depends on the amount of money one has and their share in their Demat account. The amount that can be passed should not equal the fund cap.
- Enter the sum needed to be transferred.
- Enter the trading password again to initiate the process. At Upstox, the process of withdrawals happens twice a day (morning and evening), and the request is resolved within 24 business hours.