You can pledge mutual fund schemes to receive collateral margins for trading in the Futures & Options (F&O) segment—without having to sell your investments. These collateral margins can be used for intraday, positional, or hedging strategies, depending on your risk profile and trading goals.
To help you identify the most margin-efficient and low-risk options, we provide a dedicated list and an in-app section titled “Top funds for pledging.”
What is The “Top Funds for Pledging” Section?
This section in the mutual funds highlights a shortlist of mutual fund schemes—primarily low-risk debt funds like Overnight or Liquid funds—that are approved for collateral use.
- Fund name and type (e.g., Overnight, Liquid, Direct-Growth)
- Collateral usability percentage (after haircut)
- Historical returns (like 1Y/3Y) for performance insight
This serves as a quick reference for investors seeking high-margin collateral with minimal NAV fluctuation risk.
How Does Mutual Fund Pledging Work on FYERS?
When you pledge eligible mutual fund units:
- You continue to own the units and earn any returns or dividends
- Your pledged units are locked as security, and you receive collateral margin in your trading account
- The margin can be used in the F&O segment, subject to haircut and segment rules
Haircuts are determined by the clearing corporation and vary based on the fund’s type and risk. Typically:
- Overnight and liquid funds: ~5% haircut (i.e., ~95% collateral usability)
- Other debt or hybrid funds may have higher haircuts or may not be eligible
Steps to Find the List of Pledgeable Mutual Funds
We publish the list of mutual funds and their applicable haircuts: List of approved mutual funds for pledging
Only the ISINs listed in this list are considered pledgeable. New schemes are added only if approved by the clearing corporation.
Always verify the fund’s pledge eligibility and haircut rate before initiating a pledge. Margin availability is directly affected by fund type, haircut, and NAV.
What If...
| Scenario | Outcome |
|---|
| A fund you hold is not pledgeable | Only select funds approved by the clearing corporation are eligible. You can switch to a listed scheme if needed. |
| You pledged, but don’t see the margin | Processing may take time, or the pledge may be pending approval. Check under the “Pledged” tab. |
| You want to unpledge | Go to the Mutual funds → Pledged tab, select the scheme, and click Unpledge. |
| Fund NAV drops after pledging | Your collateral value reduces accordingly. Keep track of NAV movements. |
| You want low-risk, high-margin efficiency | Overnight funds (with ~95% collateral usability) are ideal for this purpose. |
Last updated: 14 Nov 2025
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