Hi Guys!
I have a few questions regarding the CDS account and the stock broker.
- When we transfer money to our "Stock Broker (SB)"'s bank account, is that money then transfered to our "CDS Account" by the SB? Or does it happen in a different way?
- If we want to switch the SB, what would happen to the remaining money in my CDS account? (My guess is it's irrelevant as we want to switch our SB, not the CDS account.)
- Assume I have sold some stocks. Where that earned money will be transferred to? My CDS account or bank account? & How to get money from CDS account to my bank account.
- Do we automatically receive margins? Or Should we have to request our SB to allocate?
Thanks in Advance!
1. You have to transfer money to SB's bank account (with the CDS account number as the reference number) and then inform your broker via email to transfer that amount to your CDS account. You must attach the payment receipt as payment evidence.
2. As far as I know you can't switch your SB. I think, your CDS account is bound to the broker you mentioned when you created it. (Instead you can open new CDS account with the new broker. A person can have any number of CDS accounts. There are many people who has multiple CDS accounts.) Nothing will happen to your money. Until you do something new, your cash balance will remain the same.
3. Always to your CDS account. You have to inform the broker via email that you need this much of money transferred to your bank account. And if you have enough cash in your CDS, then the transfer will happen within 1,2 days. But lets say you sold some shares today and you need that money transferred. It will take 3 working days to transfer that money. Because of the
DVP system. (When creating new CDS, always ask for how to transfer money to CDS and transfer back money to your CDS from the broker. They will send you instructions). But when receiving dividends, they are deposited to your bank account.
4. No. you don't. You have to contact a your broker and margin provider and follow the process. But all brokers give 'broker credit' when new CDS accounts are created. (That is why when you deposit Rs.100,000, you will see more buying power than Rs.100,000) It is also some credit facility. If you settle them on time, you have to pay interest as well. If you don't want it, you can contact your broker and disable 'broker credit' facility. So your buying power will be equal to your cash balance.
Good Luck!!
