Raghunandan Money – Investment Khushiyon Ka.

What is Ledger Balance in a Demat Account and Why is it Important?

By: Akriti Tomar | Date : Nov 15, 25

When you invest or trade in the stock market, your securities are held in a Demat Account, while the flow of money used for buying and selling is recorded in your Trading Account. To manage your investments efficiently, it is important to understand how these funds move. This is where the Ledger Balance becomes essential. The Ledger Balance shows the net amount available in your trading account after considering all credits (money added) and debits (money withdrawn or utilized). It acts as a financial record that helps investors track funds, maintain clarity, and make informed decisions.   What is the Ledger Balance? Just like businesses maintain a ledger to record financial transactions, your trading account keeps a record of:
  • Funds transferred to the trading account
  • Amount spent on purchasing securities
  • Proceeds received from selling securities
  • Applicable brokerage, taxes, and charges
The Ledger Balance represents the net funds available after adjusting all these entries.   Ledger Balance Formula Ledger Balance = Opening Balance + Credits – Debits
Transaction Amount (₹)
Opening Balance 50,000
Money Received from Share Sale +10,000
Amount Withdrawn to Bank –5,000
Ledger Balance = 50,000 + 10,000 – 5,000 = 55,000   Difference between Ledger Balance and Available Balance
Feature Ledger Balance Available Balance
Purpose Reflects the settled fund position Reflects real-time usable funds
Update Frequency Updated after end-of-day settlement Updated instantly as transactions occur
Includes Unsettled Trades? No Yes, may temporarily
Best Use Case Reviewing past transactions Placing immediate trades
In short:
  • Ledger Balance helps track financial records
  • Available Balance helps decide your next trade
  Why is Monitoring Ledger Balance Important?
Benefit Explanation
Better Fund Planning Helps understand how much capital is free vs. invested.
Transparent Expense Tracking Allows clarity on brokerage, taxes, DP charges, and other adjustments.
Avoiding Negative Balance Regular monitoring prevents penalties or delayed payment charges.
Supports Tax Filing & Reporting Ledger statements are required at year-end for ITR and audit purposes.
  Common Mistakes to Avoid
  • Confusing Ledger Balance with Available Balance
  • Not checking ledger frequently after high-volume trading
  • Assuming proceeds from a sale are immediately usable (they settle after T+1/T+2 depending on segment)
  • Letting the account go into negative balance, which may lead to interest/penalty charges
  Frequently Asked Questions (FAQs)
  1. Why is my ledger balance different from my available balance? Because the available balance reflects real-time funds, while the ledger balance reflects only settled transactions.
  2. Can the ledger balance become negative? Yes. If the account has outstanding dues higher than available funds, the balance may turn negative.
  3. Does the ledger balance include unsettled funds from share sales? No. Unsettled proceeds reflect in available balance, not in ledger balance.
  Conclusion Understanding the Ledger Balance is essential for any investor or trader. It helps track funds accurately, evaluate charges, manage trading capital efficiently, and maintain financial clarity. Monitoring it regularly ensures transparency and prevents unexpected charges or trading limitations.   Need Assistance?  Contact RMoney Support 0562-4266600 / 0562-7188900 Email: askus@rmoneyindia.com Kickstart your investment and trading journey effortlessly with RMoney. Open your Demat Account today and take the first step towards smarter investing and trading!  

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