A Complete Guide to Transferring Money from a Demat Account to a Bank Account

Investing in the stock market is an exciting journey, and a Demat account plays a crucial role in managing your securities digitally. While buying and selling stocks is seamless, transferring the proceeds to your bank account is just as important. 

Whether you are a seasoned trader or a beginner, understanding how to transfer money from a Demat account to a bank account can save time and potential hassles. In this guide, we will provide a detailed, step-by-step process, highlight key factors to consider, and offer troubleshooting tips to ensure a smooth transaction.

How to Transfer Money from Demat to Bank Account?

You can follow these simple steps if you are wondering how to transfer money from a Demat account to a bank:

1. Login: Access your Torus account via the website or the Torus SuperApp.
2. Navigate to Stocks: From the main dashboard, click on the “Stocks” section.
3. Go to the Funds Section: In the “Stocks” tab, locate and select the “Funds” option.
4. Select Withdraw Funds: Click on the “Withdraw Funds” button.
5. Enter the Withdrawal Amount: Enter the amount you wish to withdraw. Your available withdrawable balance will be displayed in the bottom right corner below the “Enter Amount to Withdraw” field.
6. Select Your Linked Bank Account: Choose the bank account you linked during the onboarding process.
7. Complete the Transaction: Follow the prompts to finalize and confirm the withdrawal.
8. Final Status: Once the transaction is successful, you will see a message stating “Withdrawal Initiated”.

What are the Common Ways of Adding Money to Demat Through a Bank Account?

While understanding how to transfer money from a Demat account to a bank account, you must follow these steps to add money to your Demat account through bank transfer:

• Using Payment Gateway

Indian banks offer payment gateways for depositing funds using debit cards or net banking. Some brokers may charge a small fee, but credit cards cannot be used for these deposits.

• Using UPI

UPI is an easy way where you can deposit funds by going to the ‘Funds’ option in your trading account, choosing UPI, and confirming the transaction through your UPI app for immediate reflection.

• Through NEFT/RTGS

It is possible to deposit money through NEFT and RTGS in your broker’s bank account as a beneficiary under the internet banking account. After configuring it, you can transfer the funds to your Demat account.

What are the Factors to Consider When Transferring Money from a Demat Account to a Bank Account? 

After going through the steps to transfer money from a Demat account to a bank account, you must have a look at the following factors to consider when transferring:

• Funds Flow Through Trading Accounts

Funds cannot be transferred directly from a Demat account to a bank account. They must first go through a trading account that is linked to your Demat account.

• Liquidating Securities

Securities in the stock market can be easily liquidated, giving investors the flexibility to withdraw or reinvest their funds.

• Leverage and Fund Limits

Brokerage houses may lend funds for trading, creating leverage. You must differentiate between the leveraged amount and your actual trading account balance to avoid confusion.

• Payment Methods

Multiple payment options, including UPI, bank transfers, and others specified by your broker, are available for transferring funds between accounts.

What are the Common Issues and Troubleshooting of Transferring Money from a Demat Account to a Bank Account? 

After learning about how to transfer money from a Demat account to a bank, you must have a look at the following issues when transferring funds:

• Incorrect Account Linking

Make sure your Demat, trading, and bank accounts are properly linked to avoid transaction failures and delays in transferring funds.

• Disregarding Settlement Timelines

Take note of the settlement cycle for selling stocks to avoid trying to make early withdrawals. This can lead to unnecessary delays and hassles.

• Forgetting Transaction Fees

Always inquire with your broker regarding any transaction fees to avoid unexpected charges from your transfers, providing transparency in your transactions.

• Using Unsecure Networks

Always employ a safe internet connection while making transfers to avoid unauthorised access and prevent your financial details from online threats.

• Insufficient Balance in the Trading Account

Ensure you have sufficient available balance in your trading account after excluding brokerage charges, if any, before sending out transfers.

Final Words

Transferring money from a Demat account to a bank account is a simple yet crucial process for traders and investors. By understanding how to transfer money from Demat account to bank account, being aware of brokerage policies, and troubleshooting common issues, you can ensure a smooth and hassle-free experience. In addition, always keep track of your transactions and stay informed about fees and tax implications.

If you are looking to start your financial journey, consider opening a Demat account with Torus Digital to avail a quick opening process and seamless investing!