Demat Account
A Demat account holds your shares and securities electronically. But how about cash? After shares are sold, how do you actually withdraw money from a Demat account to a bank account?
Everything shall be discussed in stepwise, simple terms. From Dhan app withdrawal to all that any other broker would have to do for withdrawal: an entire process, methods like IMPS, NEFT, and dos-and-don’ts to consider for smooth funds transfer.
Table of Contents
Can You Directly Withdraw From a Demat Account?
First things first:
No withdrawal is done directly from a Demat account. It only holds your shares, not your money.
After the shares are sold, money first moves into your trading account, which is linked to your Demat account; thereafter, you can submit a transfer request to get that amount credited into your bank account.
Where Is Your Money After Selling Shares?
The proceeds from the sale of shares are withheld from immediate withdrawal; that is, after a sale, the proceeds go through a settlement period, T+1 or T+2 (one or two trading days after the date of sale), and only later, after completion of the settlement, are the funds credited into the trading account of the investor.
Yet, the funds will not show in the “withdrawable” category for some time. After the amount is reflected in the available balance section, an individual can apply for a withdrawal. Once this is done, the transfer of money into their linked bank account through IMPS, NEFT, or UPI (depending on withdrawal facilities provided by his/her broker) is implemented.
Types of Withdrawal Methods
| Method | Speed | Banking Hours Affected? |
| IMPS withdrawal | Almost instant transfer | No, works 24/7 |
| NEFT withdrawal | 2–4 hours (same day) | Yes, works during banking hours only |
| UPI (if enabled) | Fast (a few minutes to 1 hour) | Limited by app/ban |
How to Check Available Balance for Withdrawal?
Before placing the request;
- Go into the funds section in your trading app.
- Check for “Withdrawable balance” since this excludes margins held or unsettled amounts.
- An amount of ₹100–₹500 is the minimum withdrawal amount, which may vary from one broker to another.
What is the Settlement Period?
- T+1: The money is available one day after the trade.
- T+2: Some transactions take 2 days to settle the funds.
Always ensure that your funds have been settled before you initiate your financial transactions, like withdrawals.
Key Points for Smooth Withdrawals
- Link and verify your bank account.
- Funds should not be margin-held.
- Double-check the withdrawal limits of your broker.
- Withdraw during banking hours via NEFT if you want same-day credit.
- Opt for IMPS for emergency or weekend withdrawals.
Funds Management Tip
If you plan to buy shares in the near future, always keep some money in your trading account. If you withdraw all the money, you would have to deposit more in case another investment opportunity comes up.
Demat Account Is It Safe?
This is a secure process:
- All transactions must be confirmed by OTPs or app passwords.
- The funds are only credited to your registered bank account.
- You shall receive email/SMS confirmation.
Also, check – How to Check Demat Account Opening Status
Conclusion
Withdrawals from a Demat account may appear complicated at times, but once one understands it, it is quite smooth and hassle-free. The trick is to remember that withdrawals happen from your trading account and not the Demat account. With knowledge of your current balance, the settlements period, and the withdrawal method (e.g., IMPS for instant transfers or NEFT for banking hours), managing your investments and funds becomes a breeze.
Whether it is the Dhan app or any other broker platform, transferring funds to a linked bank account is very user-friendly and fast. Following the steps for withdrawing, along with a little knowledge of withdrawal limits and money management, will always give you access to your profits when you need them.
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How long does it really take to receive the money?
It depends on the method used. For instance, IMPS is instant, while NEFT takes a couple of hours. In addition, if available, UPI also processes payments quickly.
Why is my full balance unavailable for withdrawal?
Some of your funds might be under settlement or being used as margin for transactions.
What is the minimum and maximum amount that I can withdraw?
Most brokers set it at about ₹100 to ₹500 as the minimum, while the maximum would be the amount you have available and any daily limits.
Can you withdraw the money on weekends?
Yes, for both IMPS and UPI methods. NEFT and RTGS, however, are only processed during bank hours.
Disclaimer – This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.
Assistant Vice President – Research & Analysis
Akash Gupta heads the Research & Analysis department at BFC CAPITAL, where he combines in-depth market insights with strategic analysis. He holds multiple certifications, including:
- NISM-Series-XIII: Common Derivatives Certification
- NISM-Series-VIII: Equity Derivatives Certification
- NISM-Series-XXI-A: Portfolio Management Services Certification
- IRDAI Certification
With his expertise in equity, derivatives, and portfolio management, Akash plays a key role in providing research-backed strategies and actionable insights to help clients navigate the investment landscape.
