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What is withdrawable balance?

Withdrawable balance is the amount of money you can transfer from the trading account to your bank account. Your withdrawable balance may differ from the total available funds in your account since funds from trades are not immediately settled. 

In India, exchanges follow a rolling settlement cycle. If you sell stocks or make intraday profits, you will be able to utilise the proceeds to buy other shares. However, funds from the sale proceeds get settled to your trading account after two trading days. Similarly, trades in the F&O segment get settled after one trading day. Learn more about rolling settlement in this article.

You will be able to withdraw only the funds that have been settled to your account. 

The withdrawable balance is calculated in the following way:

Withdrawable balance = Available cash balance - Proceeds from stocks sold yesterday & today - Intraday equity profit made yesterday & today - F&O profits today - Funds added today.

You should note the withdrawable balance is computed after adjusting the margins blocked if you've pledged your holdings and raised margins to trade in the derivative segment with available cash balance:

  • 50% of the margins blocked have to come in the form of collateral margins & the other 50% by way of cash or cash equivalent. Margins received by pledging liquid bees are considered part of the cash equivalent.
  •  If you do not have enough collateral margins to cover for 50% of the margin blocked, the difference will be charged from the available cash balance

Here's an example to help you understand better:

Assume, you have collateral margin of Rs 20 thousand from pledged liquidbees and Rs 90 thousand from pledged stocks after the required haircut. You also have Rs 70 thousand free cash in your account and then take an overnight F&O position which requires a margin of Rs 1 lac.

In this case, you will be able to utilize up to 50% of the required margin using the pledged stocks i.e. Rs 50 thousand. The remaining 50,000 margin has to be covered by cash/cash equivalent. Part of this 50,000 (worth Rs.20,000) will be fulfilled from liquidbees since it is considered part of the cash equivalent, this leaves with a balance of 30,000 that will be fulfilled from the available cash balance of Rs.70,000. This leaves you with a withdrawable balance of Rs.40,000.

Important Points
  • Collateral margin received from pledging stocks or liquid mutual funds to trade F&O will not be considered as part of the withdrawable balance. 
  • Funds added during the day are available for trading immediately. However, since we need to perform a balance reconciliation at the end of the day, you can withdraw these funds only after one day.