How Long Does It Take for Shares to Reflect in the Demat Account?

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With the advent of the internet, the process of buying and selling shares has become extremely convenient. You can simply click and purchase or sell shares of any company. However, a significant question arises regarding the duration it takes for shares of a company to reflect in our demat account after purchasing them.

If you are seeking the answer to this question, you are welcome to this article. Here, we will elaborate on the number of days it takes for shares of a company to reflect in your demat account after purchase.

How Long Does It Take for Shares to Reflect in the Demat Account?

When it comes to the duration for shares of a company to reflect in your demat account after purchase, the process has evolved over time. Previously, as per SEBI regulations, it took 48 hours or 2 days for the shares to be transferred to the demat account after the order was placed. However, as of the present date, the duration has been reduced to 24 hours, commonly referred to as the T+1 period.

To break it down, T represents the day when the order to buy shares is placed, and T+1 signifies the next day when the money is transferred to the exchange and shares are received by the broker on your behalf. Within this 24-hour T+1 settlement cycle, the shares will reflect in your demat account.

Overall, this streamlined process has made trading more convenient, ensuring that within 24 hours of buying or selling shares, the shares or money will reflect in your account.

How Long Does It Take for Shares to Reflect in the Demat Account?

Understanding Clearing and Settlement in Stock Markets

The process of clearing and settlement is crucial in comprehending the movement of funds and securities between traders and the stock market. It is essential to understand the duration it takes for shares to be remitted to or from a Demat account when engaging in stock transactions.

Buying a Stock:

Day 1 – The Trade (T Day), Monday: When purchasing stocks, the broker verifies the availability of necessary funds in the trading account. For instance, buying 100 shares of Reliance Industries at Rs.1,000/- per share requires Rs.1,00,119.19/-, including applicable charges. A contract note detailing the transaction is generated on the trade date.

Day 2 – Trade Day + 1 (T+1 day, Tuesday): Post-implementation of T+1 settlement, the purchased shares are credited to the buyer's Demat account the day after the trade.

Selling a Stock:

The day of selling is also known as the 'T Day.' The stocks are earmarked for settlement and are debited from the Demat account before being moved to the clearing corporation for pay-in. The seller receives 80% of the funds on T-Day and the remaining 20% on T+1.

First, Understand What T Means

Here, T refers to the day when you place an order to buy shares of a company. For example, if you place an order to buy shares of a company on the current day, T would represent the current date. On this day, your order to buy shares is passed on to the broker, and the broker withdraws the required amount from your linked bank account through the trading account and places an order to purchase shares of the relevant company.

The bill for the shares you buy is sent to your email after the market closes. The day you tell the broker to buy shares is called "T." The broker carries out the order at the exchange, but you don't get the shares immediately.

What Is T + 1?

You know what T means - it's the day when you make a BUY or SELL order. Plus one means the next day. On this day, the money you give to the broker goes to the exchange, and in return, the broker gets shares from the exchange. These shares then show up in your demat account through your broker.

Conclusion

After the T+1 settlement time cycle, trading has become quite convenient for people because within 24 hours from buying or selling shares, the money or shares reflect in our account.

We hope that after reading our article, you now have a clear understanding of how long it takes for shares to reflect in the demat account.

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