Online apps that offer stock market trading and opportunities to invest in everything from mutual funds to real estate and gold, have caught the attemtion of milennials and GenZs alike. The speed and convenience at which stocks and other instruments can be traded can make them attrative options for young investors being lured towards cryptocurrencies. This makes the T+1 settlement cycle implemented by Indian exchanges NSE and BSE, a gamechanger.
T+1 means trade plus one, and indicates that all settlements related to stock trading will be cleared within a single day. Before that, investors had to wait for two working days for the same to go through after a transaction takes place. The implementation had started from February 25 last year, and 500 securities transitioned towards the T+1 system every month since then. From the January 27, the same has been introduced for ETFs, SME shares, InvITs and gold bonds as well.
This settlement mechanism will allow the cycle of money in the markets to move faster, and also places India ahead of most emerging and developed markets across the globe, which still follow the T+2 system.
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