What is Settlement Holiday?
5paisa Research Team
Last Updated: 03 Jul, 2023 11:30 AM IST
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Content
Introduction
The stock market in India functions on set regulations. You need a trading account to buy and sell stocks. Whatever you buy gets credited to your Demat account, and whatever you sell gets debited from there. A Demat account is very similar to a bank account or bank locker.
However, when trading stocks in India, equity settlements take place after two days of trading, i.e. T+2, where 'T' stands for trade day or the day you traded. For example, if you buy stocks on Friday, your shares would get credited to your Demat account on Tuesday. The reason is Saturday and Sunday are not considered working days. Therefore, Monday would be T+1, while Tuesday would be T+2. Hence, the settlement day would be Tuesday, and it is known as Normal settlement. Having understood what a settlement day is, now let us comprehend what a settlement holiday is, and how NSE holidays, BSE holidays, and share market holidays are interlinked to it.
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