Is It Possible To Transfer Money From A Demat To Bank Account?

Demat Accounts are ideal for people interested in investing in different Share Market securities. They allow investors to hold all their investments in dematerialised or electronically. This means they need not worry about maintaining or losing their investment certificates or presenting them when they want to withdraw the investments.

Several investors are often confused about Demat Account and wonder if they can transfer money from their Demat to Savings Account. While this is impossible, you can transfer funds to your Bank Account through the Trading Account. Here is how:  

Demat is not money-oriented

Demat Accounts are essentially holding accounts. Its primary function is to store or hold investments digitally securely. This is an account where your market investments are safeguarded. Cash transactions do not happen through this account, which is why it is impossible to make transactions or fund transfers through this.

Used for viewing, storing, and managing investments

Besides holding securities, Demat Accounts are essentially passive account. You can log in to this account to see how your funds perform. You can view investment performance over the years. If you see a profitable fund or notice that you booked the profit you intended, you can take the call to buy or sell your investments. But they need to be taken through the Trading Account.

If you have opened them through a bank where you hold your Savings Account, you can also do these activities through the Banking app.

Role of Demat and Trading Accounts

The most important thing about Demats is that when you open the account, you need to open Trading Account and already have an online Bank Account. While you can hold your investments in the Demat, you can place orders to buy and sell the securities through your Trading Account. Funds are also transferred from the Trading to Bank Account. As such, the Trading Accounts are linked to your Bank Account.

Transferring funds from Trading to Savings Account

1. Login to the Trading Account
2. Find the fund transfer facility under the section ‘Accounts’.
3. Look for the manual transfer option provided by your broker to get the amounts credited to your Saving Bank Account.
4. If the manual transfer option is unavailable, you should request to your broker via call or online, and the funds get transferred to your Bank Account in T+ 2 working days.

Final word

When you decide to sell or withdraw some securities, you can complete the transaction through the Trading Account. You can remove the securities from your Demat, and the funds are transferred into your Bank Account. Similarly, when you invest in security, you can place the order from your Trading Account, which then reflects on your Demat, and the sums are debited from your Savings Account. Check if you are eligible for a free Demat when you apply.