How to pledge mutual fund investments to get collateral margins?
Pledging mutual funds is a two-step process. The first step is to pledge the mutual funds on Console, and the second step is to authorise the pledge on Central Depository Services Limited (CDSL) portal by 7 PM. If the pledge is not authorised by 7 PM, margins will not be provided against the pledged mutual funds. If the pledge is authorised, the margins will be available from the next trading day. The process is as follows:
Pledging mutual funds on Console
- Log in to console.zerodha.com.
- Click on Portfolio and then on Holdings from the drop-down menu.
- Click on Options.
- Click on Pledge for margin from the drop-down menu.
- Enter the quantity to be pledged.
- Click on Submit.
Zerodha processes pledge requests at 2:00 PM and 5:00 PM only on days when the equity market is open. The list of securities on which pledging is allowed and the haircut % on them can be found on this (DOC).
Authorising the pledge request on CDSL
- Check the registered email ID or mobile number for the CDSL’s notification.
- Log in to cdslindia.com/Authentication/OTP.aspx using PAN.
- Click on the checkbox with the pledge details.
- Click on Generate OTP.
- Enter the OTP and click on Submit.
The cost of pledging is ₹30 + GST per instrument, irrespective of the quantity pledged. There are no charges for unpledging.
Did you know?
- F&O segment has to be active to pledge holdings. To activate the segment, see How do I activate F&O?
Fractional units of both Liquid BeES and mutual funds cannot be pledged. To learn more, see
What is a fractional share?
- Pledged mutual funds can be sold only after they are unpledged. A pledge request can be cancelled only if it is not processed. To learn how to unpledge instruments, see How do I unpledge shares?