3.23What is settlement (T+1)?
Time-sensitive: T+1 settlement (and an optional T+0 for select stocks) as of November 2026. Rules and rates change, so check the official source before acting.
1What is it?
Settlement is when the buyer actually receives shares and the seller actually receives money. India uses T+1: trade day plus one working day.
2Why does it exist?
Faster settlement reduces risk (less time for something to go wrong) and frees up money quickly. India moved fully to T+1 in January 2023, among the first major markets to do so. An optional same-day (T+0) cycle also exists for a limited set of stocks.
3Stock market example
If you buy on Friday, shares reach your demat on Monday (next working day). If you sell, the money is usable for new trades almost immediately but can be withdrawn after settlement.
4Diagram
- 1Monday (T): you buy 10 Infosys shares
- 2Money blocked/debited
- 3Tuesday (T+1): shares credited to demat
- 4Seller gets money on T+1
5Quick revision
- Settlement = actual exchange of shares and money.
- India uses T+1.
- Holidays and weekends don’t count.
6Knowledge check
Q1. You buy on Thursday. When are shares credited?Show answer
Friday (T+1), if it is a working day.
Q2. Why is faster settlement better?Show answer
Less risk and faster access to money.
Q3. When did India complete the move to T+1?Show answer
January 2023.
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