SEBI mandates stockbrokers to settle (transfer available credit balance from Trading account to Bank account) the client’s funds lying in the trading accounts at least once in a quarter (90 days) or 30 days. This process of transferring unused funds back is called ‘Running Account Settlement’ or ‘Quarterly Settlement of funds’. The funds are transferred back to the primary bank account mapped to your Zerodha account.

Recently, SEBI made changes in the way funds are settled, mandating that all brokers transfer back funds to the client's account in 3 days if there have been no trades in the client's account for a period of 30 days. This is despite the client having chosen the '90-day' settlement cycle. This means that if you haven't traded continuously for 30 days in any segment, the funds will be transferred back to your account in the next three days. Suppose the client has chosen the 90-day settlement cycle, i.e. quarterly settlement, and the client has traded continuously without the gap of 30 days. In that case, the funds will be transferred to the client's account only after 90 days, i.e. quarterly settlement.

For example:

If your free cash was ₹10000/- on August 01st and you haven't traded the entire month until 30th, your funds of ₹10000/- will be transferred back to your bank account within September 02nd. Suppose you're an active trader and the gap between your trades is less than 30 days, and you've chosen the 90-day settlement cycle. In that case, the funds will be transferred back only after 90 days, i.e. quarterly settlement.

You can check the tentative dates of your next quarterly settlement on the Funds page on Console.

If a broker is required to retain the funds instead of refunding them back to the bank account, the account is to be marked as retained and a statement explaining the basis for such retention is to be sent to the client by the broker. See What is Retention statement?