What is a settlement holiday and how does it affect you?
A settlement holiday is a day when the markets are open for trading, as usual, but the clearing and settlement of funds and securities does not take place on that day because either there is a bank holiday, or the depositories (NSDL/CDSL) are closed or its both.
When you buy or sell a stock, the transfer of shares and funds doesn't happen instantly. It follows a T+1 cycle, meaning settlement happens one business day after your trade. On a settlement holiday, this cycle pauses for the day as banks or clearing systems are closed.
In simple terms - you can trade, but the funds and shares won't move until the next working day.
What happens a settlement holiday?
- You can buy and sell shares normally.
- The standard T+1 settlement cycle pauses, shifting obligations forward.
- You don’t receive shares or funds due from the previous trading day until the next working settlement day.
Auction markets are closed, so you cannot participate in auction trading.
Here are the impacts:
- No BTST trades the day before settlement holiday: Shares bought the day before a settlement holiday will not be credited to your account in time, so selling them the next day (BTST) will not be possible.
- Fund withdrawals get delayed: Any withdrawal request placed on the day of the settlement holiday will be processed on the next working day instead.
- Credits from trades are delayed: You cannot use the profits made from intraday trades, F&O proceeds or share sales executed the day prior to settlement holiday for trading on the day. These will be credited to your account the next day of holiday.
- Funds availability shifts by a day: All pending credits and profits will be available for withdrawal by end of day on the next working day after the settlement holiday.
Let’s understand this with an example. On 1st February, 2026 the markets were open for trading on Sunday. However, it was a settlement holiday on that day.
If you made any profits on your trades on 30th January or had a credit from your F&O positions on 30th January, then these credits will reflect in your trading account on the 2nd February 2026. You cannot utilise them for your trades on 1st Feb.
Plan your trades and withdrawals keeping the settlement holiday in mind. If you're unsure how a specific trade will be affected, reach out to your Relationship Manager or our support team.
Related Articles
