How to pledge mutual funds for margin on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Mutual fund units held in demat form in your Zerodha demat account can be pledged as collateral to generate margin for trading in Futures and Options (F&O), equity intraday, and commodity segments on Zerodha’s Kite platform. This is a SEBI-permitted mechanism that allows investors to use their mutual fund corpus as trading margin without redeeming the units.

Prerequisites

An active Zerodha trading and demat account with complete KYC and F&O segment activated.
Mutual fund units in your Coin CDSL demat account (not SOA-folio units).
CDSL TPIN or access to CDSL-registered mobile for OTP.
Understanding that ELSS units in lock-in period cannot be pledged.
TOTP authenticator for Zerodha two-factor login.

Regulatory framework for pledging mutual funds as margin

SEBI Circular SEBI/HO/MRD/DRNP/CIR/P/2020/218 (October 2020) overhauled the margin pledge framework for brokers and clients. Key provisions:

Pledge Mutual Fund on WebNotes

How to pledge mutual funds for margin on Zerodha

Prerequisites

Regulatory framework for pledging mutual funds as margin