T+0 settlement: getting shares and money the same day

India has been moving toward faster settlement of trades, including a same-day option called T+0. This guide explains what T+0 settlement is and how it differs from the usual cycle.

Quick answer

T+0 settlement means a trade is settled on the same day it is done, so the buyer gets the shares and the seller gets the money that day. It is faster than the usual T+1 cycle, where settlement happens the next working day. T+0 aims to speed up when investors receive their shares or funds.

Key takeaways

• T+0 settlement completes a trade on the same day.
• The buyer gets shares and the seller gets money that day.
• It is faster than the usual T+1 cycle.
• It aims to speed up access to shares and funds.
• India has been rolling it out in phases.

What is T+0 settlement?

T+0 settlement means a trade is settled on the same day it takes place. The T stands for the trade day, and the zero means settlement happens on that day, with no delay.

So under T+0, when you buy shares, they can reach your demat account the same day, and when you sell, the money can reach you the same day, rather than waiting.

How is it different from T+1?

For most trades, India uses a T+1 cycle, where settlement happens the next working day after the trade. T+0 speeds this up further to the same day.

So the difference is timing. T+1 is already fast by global standards, and T+0 is faster still, completing the trade on the very day it is done.

Why move to faster settlement?

Faster settlement means investors get their shares or money sooner, which is convenient and reduces the time their funds or shares are tied up in the settlement process.

It can also reduce certain risks, since a shorter gap between trade and settlement leaves less time for problems to arise before a trade is completed.

How is it being introduced?

India has been introducing T+0 in phases, starting with a set of stocks and an optional basis, alongside the main T+1 cycle. This careful roll-out lets the system adjust.

Over time, faster settlement options can widen, but the exact scope depends on how the roll-out progresses under the regulator's guidance.

What should investors know?

For investors, T+0 can mean quicker access to shares or money after a trade. Whether it applies depends on the stock and the current stage of the roll-out.

Understanding settlement cycles helps you know when to expect your shares or funds. Any investment decision should be your own after proper research.

Frequently Asked Questions