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What is BSPL (Buy Stocks Pay Later)?

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In the fast-paced world of stock trading, having financial flexibility can make all the difference. That’s where BSPL (Buy Stocks Pay Later), comes in. BSPL allows you to invest in stocks today while deferring the payment to a later date, offering you the chance to capitalise on market opportunities without the immediate financial burden. This facility is designed to enhance your buying power and improve cash flow management, making it easier to engage in market activities without upfront full payment.

With BSPL, investors can leverage this powerful tool to increase their investment potential while maintaining financial flexibility. Whether you’re an experienced trader or just getting started, BSPL provides a straightforward way to navigate the stock market, enabling more strategic moves based on current trends.

How does BSPL work?

BSPL works by allowing investors to purchase stocks immediately and defer the payment to a specified future date. This system gives traders the flexibility to act quickly on market opportunities without needing to fully commit their funds right away. By offering more time to settle the payment, BSPL allows investors to manage their cash flow effectively and take advantage of larger investment opportunities.

In short, BSPL empowers you to make the most of the stock market, enabling you to invest now and pay later, all while maintaining control over your finances.

Key points:

  • Purchase stocks or ETFs and take advantage of the BSPL benefit by agreeing to the terms and conditions when placing your order through Bajaj Broking.

  • Boost your buying power with our BSPL, allowing you to initially pay only a small percentage of the stock or ETF value, which can enhance your return on investment.

  • Benefit from higher leverage and capitalise on short-term market movements with our BSPL.

Benefits of BSPL for investors

BSPL offers several advantages that can enhance your trading experience and financial management:

  • Bajaj Broking offers low brokerage fees and personalised brokerage plans tailored to your needs.

  • Our BSPL provides competitive interest rates and allows you to trade now and pay later with up to 4x leverage.

  • Investment advisory services are available through stock baskets, which are carefully curated collections of well-researched stocks.

  • Real-time insights are accessible via our app, keeping you updated on market movements.

  • The Bajaj Broking app includes top-tier security features to protect your data.

  • Customised alerts and watchlists can be created using our app to help you manage your investments effectively.

Eligible stocks for BSPL (Buy Stocks Pay Later) trading

The BSPL facility is available for a range of stocks. Here is a quick look at the types of stocks eligible for BSPL trading:

Stock category

Description

Blue-Chip Stocks

Established, financially stable companies.

High Liquidity

Stocks with high trading volumes.

Top Performing

Stocks with strong recent performance.

BSPL vs. MTF: key differences

Understanding the differences between BSPL and MTF can help you choose the right trading approach. Here is a table outlining the key differences:

Key differences

BSPL

MTF

Payment Timing

Allows deferred payment

Requires payment of margin upfront

Flexibility

Offers more flexibility in payment schedules

Generally less flexible in payment terms

Risk Management

More straightforward in terms of payment

Often involves higher risk due to leverage

How to use BSPL on the Bajaj Broking platform

Using BSPL on the Bajaj Broking platform is a straightforward process. Follow these steps to get started:

  • Open the Bajaj Broking Mobile App and log in to your account.

  • Choose the stocks you want to trade from your preferred list.

  • Click on the ‘Buy’ option for the selected stocks.

  • Enter the quantity of stocks you wish to purchase and select ‘MTF’ as the product type.

  • Confirm your selection by clicking on ‘Confirm Buy’ to finalise the purchase.

  • Ensure you pledge your MTF stocks before 11:59 PM on the day of purchase to complete the process.

Interest rates and charges in BSPL

Here are some key points regarding interest rates and charges for BSPL:

Bajaj Broking offers a BSPL with low interest rates:

  • Professional Pack: 14% interest per annum

  • Freedom Pack: 18% interest per annum

ETF through BSPL (Buy Stocks Pay Later)

BSPL also applies to Exchange-Traded Funds (ETFs), providing additional flexibility:

  • Investment flexibility: With BSPL, you can purchase ETFs and defer payment, allowing you to invest immediately while settling the cost later.

  • Diverse options: The BSPL facility gives you access to a broad range of ETFs, enabling you to invest in various sectors such as banking, IT, pharmaceuticals and international markets.

  • Strategic trading: This facility is ideal for building a diversified portfolio with a smaller capital outlay, as it allows you to gain a larger position with less initial investment.

Risks associated with BSPL (Buy Stocks Pay Later)

While BSPL offers flexibility, it comes with certain risks:

  • Leverage: BSPL provides high leverage, which can magnify both potential gains and losses. This increased risk means that while profits can be substantial, losses can also be significant.

  • Market fluctuations: A decline in the market could result in considerable losses, affecting the value of your investments.

  • Margin call: If the value of your pledged securities falls below a specified level, you may receive a margin call. This requires you to either add more collateral or repay a portion of the borrowed funds to maintain your position.

  • Interest costs: You will incur interest charges on the borrowed amount, which can add to the overall cost of your investment.

  • Potential loss of principal: If the value of your stocks declines significantly, there is a risk of losing your principal investment and potentially more.

Case study: maximising returns with BSPL

Let’s say you have ₹50,000 available for trading, but you want to buy shares worth ₹2,00,000. Using the Buy Stocks Pay Later (BSPL) facility offered by Bajaj Broking, you can use your ₹50,000 as margin and borrow the remaining ₹1,50,000 to complete the purchase.

For example, if you want to buy 100 shares of a company trading at ₹2,000 per share, the total cost would be ₹2,00,000. With BSPL, you only need to pay ₹50,000 upfront, and Bajaj Broking provides the remaining ₹1,50,000 on credit. You can then repay the borrowed amount later with a small interest fee while holding the shares.

In this case, BSPL allows you to take advantage of a larger market opportunity without needing the full funds immediately.

Conclusion

BSPL offers a valuable tool for investors seeking financial flexibility and strategic market access. By understanding its benefits, working mechanism and how it compares to margin trading, investors can make informed decisions and optimise their trading strategies.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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Frequently Asked Questions

What is BSPL and how does it work?

Answer Field
BSPL (Buy Stocks Pay Later) allows investors to purchase stocks immediately while deferring the payment to a later date. This provides financial flexibility, enabling investors to capitalise on market opportunities without needing to pay the full amount upfront.

Can I short-sell using BSPL (Buy Stocks Pay Later)?

Answer Field

BSPL is typically designed for long positions only. It allows investors to buy and hold stocks with deferred payment but does not accommodate short selling, which involves selling borrowed stocks with the expectation of buying them back at a lower price.

What are the interest rates and penalties for late payments?

Answer Field
Interest rates on the borrowed amount under BSPL vary depending on the chosen subscription plan. Additionally, if payment is not made by the due date, you may incur extra charges or penalties. These fees are intended to cover the cost of the deferred payment and any associated risks.

How long can I hold stocks under BSPL (Buy Stocks Pay Later)?

Answer Field

Under BSPL, stocks can be held until the payment deadline, which is usually the end of the trading day or as defined by the broker’s terms. This period allows you to maintain your position while deferring the payment, provided you settle the amount due by the specified date.

What happens if I do not square off my position by the due date?

Answer Field

If you do not settle your position by the due date, you may face penalties or have your positions forcibly squared-off. This is to ensure the broker can recover the borrowed amount and manage the risk associated with unpaid positions.

How does BSPL affect my margins and cash requirements?

Answer Field

BSPL reduces immediate cash requirements by allowing you to invest with deferred payment. This means you can maintain a lower cash balance while still holding substantial positions. It also provides more flexibility in managing margins as you are not required to cover the full amount upfront.

Can I convert my BSPL (Buy Stocks Pay Later) trade into delivery?

Answer Field

Yes, you may be able to convert a BSPL trade into a delivery position, depending on the certain specified terms. This would involve paying for the stocks to take delivery of them, thus transitioning from a margin-based position to outright ownership.

Which stocks are eligible for BSPL trading?

Answer Field

Stocks eligible for BSPL trading typically include blue-chip stocks, high-liquidity stocks and top-performing shares, as specified by the broker. Bajaj Broking offers BSPL facility on 900+ stock scrips.

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