What is MTF in Groww?

MTF (Margin Trading Facility) in Groww lets you buy more shares than you can actually afford. Basically, Groww lends you extra money to invest in stocks, and you pay it back later with interest. Imagine using a Pay Later option while shopping online, but instead of clothes, you’re buying shares.

Steps to Activate MTF in Groww

Here are the steps to activate MTF in Groww:

1. Open the Groww App.

2. Search for the stock that you want to purchase.

3. Tap on the “Buy” option.

4. On the orders page, select the MTF option.

5. Now set the quantity and price.

6. Tap the “Buy” option.

In this way, the MTF order will be placed successfully

Benefits of MTF in Groww

Here’s why many traders use MTF on Groww. It’s like getting an extra wallet from Groww to shop for shares, even if your pocket is half empty.

Profit Even with Less Money: You don’t need all the money to invest. If you have ₹10,000 and want to buy shares worth ₹40,000, Groww helps you do that using MTF. So if your stock goes up, your profit is on ₹40,000, not just ₹10,000. For example, stock goes up 10%, you earn ₹4,000 instead of ₹1,000.
More Purchasing Power: MTF gives you the power to buy big-brand stocks like Infosys, HDFC Bank, Reliance, even if you don’t have the full amount. Like buying a ₹1,000 T-shirt from Myntra with ₹250 and paying the rest later.
Higher Returns: Since you're investing more money (thanks to Groww’s extra funds), your returns can grow faster, but only if the stock performs well. Bigger risk, yes, but also bigger reward.
Portfolio Diversification: Let’s say you have ₹20,000. You can buy one stock OR use MTF and split your investment into 3-4 good stocks. That way, even if one stock doesn’t do well, others might balance it out.
Short-Term Gains: MTF is best for traders who want to make profits in a few days or weeks. You don’t have to wait for months or years. If your analysis is strong, MTF can help you catch fast-moving stocks.
Tax Benefits: Some users may get tax advantages depending on how they trade under MTF. This depends on your trading type and holding period.

Disadvantages of MTF in Groww

While MTF looks exciting, it also comes with serious risks. It’s like riding a fast bike, great if you control it, dangerous if you don’t.

1. Bigger Losses if the Market Falls

MTF can double your profit and double your loss. If the stock price drops, your loss is also higher because you invested more money (even though part of it was borrowed).

For example, you invest ₹40,000 using MTF (₹10,000 yours + ₹30,000 borrowed).
If the stock falls 10%, you lose ₹4,000, which is 40% of your money.

2. Daily Interest = Less Profit

Groww charges daily interest (around 0.043% per day). So even if your stock price goes up slowly, your profit gets eaten by interest.

For example, you borrow ₹30,000, ₹15/day interest.
Hold for 10 days = ₹150 + GST. That’s from your pocket.

So the longer you hold, the more you pay, even if you don’t sell.

3. Margin Call = Forced Selling

If your stock falls too much, Groww can sell your shares to cover its money. You don’t even get to decide. Like taking a car loan, the bank takes the car back if you miss an EMI.

How to check MTF charges?

Want to know how much Groww charges for MTF? It’s very easy to check inside the app.

Open the Groww App on your phone.
In the search bar, type “Groww Pricing.”
Tap on the result named “Groww Pricing” (usually in green text).
You’ll be redirected to Groww’s official website.
There, you can see the full list of MTF charges, including: Interest rates, brokerage, GST, Pledging charges (if any)

Note: Bookmark the page or take a screenshot for future use.

MTF Charges on Groww

Before using MTF, it's important to know what Groww charges you. Here are the main fees:

Brokerage: A Charge of 0.1% applies to every order.
Interest rate: 15.75% per year (for loans below ₹25 lakhs).
Daily Interest: Around 0.043% per day.

For example,

If Groww lends you ₹20,000 using MTF,
You’ll pay about ₹8.60 per day in interest (₹20,000 x 0.043%).

This interest is charged daily, even if you don’t sell the stock. So, the longer you hold, the more you pay. Always calculate if the expected profit is more than the interest cost.

Conclusion

In conclusion, MTF in Groww is like getting an extra wallet to invest more than what you have. It gives you the power to buy high-value stocks, even with limited funds. But remember, with great power comes great responsibility. If your stock performs well, you can earn high returns. But if it drops, the losses and interest charges can hit hard.