As per SEBI’s circular (WEB), funds in the trading account must be transferred back to the client's bank account once a quarter. Transferring unused funds back to the primary bank account is called quarterly settlement of funds or running account settlement .

At Zerodha, settlement happens on the first Friday of the quarter, i.e., the first Friday of October 2022, January 2023, April 2023, July 2023 and so on. If the first Friday is a trading holiday, then the settlement would happen on the previous trading day. However, funds are transferred back to the primary bank account once a month if the client is inactive for 30 calendar days. It will reflect in the funds statement as follows:

Did you know?

• Brokers may retain the funds if a client has an outstanding position on the first Friday of the quarter on which settlement is scheduled and send out an email with the retention statement. See, What is a Retention statement?
• If the settlement of funds with a broker is monthly, the settlement date will be the first Friday of the month.