Value date (settlement)
Key points
- Equity trades on Borsa Istanbul settle at T+2; mutual funds settle at T+0 (money market), T+1 or T+2 (equity funds) depending on type.
- The value date is critical for cash planning: an investor planning to pay a bill from a fund or stock sale must account for it.
- missing the fund cut-off time pushes settlement by a day.
Formula / calculation
proceeds from a stock sold on Monday reach the account on Wednesday and can only be transferred to the bank that day. The same cash can buy new stock on Monday (purchases are also T+2 so settlements align). A T+2 fund sale delays the cash outflow by two business days.
Interpretation
In banking it is the day interest starts accruing on deposits and transfers.
The value date is critical for cash planning: an investor planning to pay a bill from a fund or stock sale must account for it. Public holidays lengthen the settlement period.
Pitfalls
missing the fund cut-off time pushes settlement by a day. Cash can sit idle for days when switching between assets with different value dates. Bank value dating should not be confused with exchange settlement.
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Frequently asked questions
What is Value date (settlement)?
The value date is the period between the day a transaction is executed and the day the cash or securities are actually credited to the account.
How is Value date (settlement) calculated?
proceeds from a stock sold on Monday reach the account on Wednesday and can only be transferred to the bank that day. The same cash can buy new stock on Monday (purchases are also T+2 so settlements align). A T+2 fund sale delays the cash outflow by two business days.
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