Question 1

What is an ETF and how does it work?

Accepted Answer

An ETF, or Exchange Traded Fund, is a basket of securities such as an index, gold, or a sector that trades on the exchange like a single stock. Its price moves through the day with the market, and it usually tracks an underlying index at a low cost. You buy and sell it through a demat account.

Question 2

Do I need a demat account to invest in ETFs?

Accepted Answer

Yes. Because ETFs trade on the exchange like shares, you need a demat and trading account to buy and hold them. This differs from index mutual funds, which you can buy without a demat account. Sahi lets you open an account and trade 300+ ETFs across NSE and BSE.

Question 3

What is the difference between an ETF and a mutual fund?

Accepted Answer

An ETF trades on the exchange in real time at market price and needs a demat account, while a mutual fund is bought and sold once a day at NAV. ETFs usually carry lower expense ratios, and mutual funds allow easy SIPs without a demat account. Both offer diversification across many holdings.

Question 4

How do I buy an ETF in India?

Accepted Answer

Open a demat and trading account, search for the ETF by name or symbol, and place a buy order as you would for a stock. Watch the bid-ask spread and buy near fair value. Sahi shows full market depth with five bid and ask levels, plus charts, so you can time the order.

Question 5

Can I buy and sell ETFs anytime like stocks?

Accepted Answer

Yes. ETFs can be bought and sold throughout market hours at live prices, unlike mutual funds, which transact once a day at NAV. This gives ETFs intraday flexibility. Checking full market depth helps you trade close to the fund's fair value.

Question 6

Can I pledge ETFs to get margin for trading?

Accepted Answer

Yes. Liquid and other eligible ETFs can be pledged as collateral to get margin for derivatives, with margin usually available soon after pledging. Sahi supports pledging 60+ eligible ETFs, letting idle holdings work as trading collateral, subject to the cashcollateral rules.

Question 7

How are ETFs taxed in India?

Accepted Answer

Equity ETFs are taxed like equity: short-term gains on holdings under a year at the applicable STCG rate, and long-term gains above the exemption at the LTCG rate. Gold, silver, debt, and some global ETFs follow non-equity rules. Rates change with the Budget, so verify the current rules. This is general information, not tax advice.

Question 8

What is a liquid ETF?

Accepted Answer

A liquid ETF invests in very short-term, low-risk instruments and is used to park idle cash in your demat account while earning a small return. Traders often hold liquid ETFs and pledge them as margin collateral. Sahi lists liquid ETFs among its 300+ ETFs across categories.

Trade 300+ ETFs
on NSE & BSE

Find Your ETF

Why choose SAHI for ETF trading

Chart-centric trading

1-Tap execution

Full Market Depth

Live Snapshot

Make your capital work twice

FAQs

High performance trading
at unmatched value

Trade 300+ ETFson NSE & BSE

Indices