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MTF stands for Margin Trading Facility. On Groww, MTF lets you buy stocks by paying only a part of the money yourself — and Groww lends you the rest. (Groww)
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Essentially, it's like a “buy now, pay partly later” scheme for stocks. If you want to buy shares worth ₹ 1000, you might pay only ₹ 250 (25%), and Groww funds the remaining ₹ 750. (Groww)
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The shares you buy using MTF are pledged as collateral to Groww (or held under margin), until you repay the borrowed amount. (Groww)
In short: MTF gives you leverage — the ability to buy more shares than you could afford with your own cash.
How MTF Works on Groww — Step by Step
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In Groww App, pick the stock you want to buy. (Groww)
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Instead of “Delivery” order type, choose the “MTF” option on the order screen. (Groww)
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Agree to terms & conditions, then enter the quantity and confirm. Groww funds the remaining amount. (Groww)
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The shares bought via MTF are automatically pledged — meaning they act as security for the borrowed amount. (Groww)
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You can hold the position; in many cases, there is no fixed limit on the holding period (subject to margin norms). (Groww)
Groww charges interest on the borrowed portion — for example at 14.95% per annum (or ~ 0.041% per day) as per their public page. (Groww)
Why People Use MTF — Potential Benefits
Using MTF can be attractive in some situations:
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Higher buying power / leverage: You can buy more shares than your immediate cash allows. For small investors — this can seem attractive. (The Economic Times)
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Opportunity to benefit from short-term market moves: If you expect a stock’s price to rise soon, MTF lets you invest more and thus amplify returns. (Groww)
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Flexibility — no separate account needed: MTF works with your existing trading & demat account on Groww. (Groww)
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Possibility of cashless trading (pledge margin): If you already own eligible shares in your demat, Groww may allow pledging them instead of cash — meaning you don’t always need new cash. (Groww)
So, for someone who believes strongly in a stock’s near-term potential and is willing to take risk, MTF can amplify returns.
The Risks & Downsides of MTF
But MTF comes with significant risks — leverage means losses can be magnified too. Some of the main drawbacks:
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Big losses if stock price falls: Just like gains are amplified, losses are amplified. A small drop in stock price can wipe out a large portion of your own invested capital. (Dhan)
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Interest costs add up: Since you borrow money, Groww charges interest on the borrowed portion. Holding for longer periods increases interest cost — which can reduce/net out your profits, or deepen losses. (Groww)
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Margin requirements and possible liquidation: If the value of your holdings falls or margin norms change, you may have to bring more funds (margin call), or Groww might forcibly sell (square-off) your holdings. (Dhan)
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Not all stocks are eligible: MTF is available only for certain stocks approved under exchange/broker criteria — you can’t use it for every listed share. (Groww)
Thus, MTF is not a safe “set-and-forget” tool. It requires active monitoring of market, margins, and costs.
Recent Updates & Changes in MTF (On Groww)
The MTF facility on Groww is evolving. Some recent updates:
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You can now convert MTF positions to delivery — meaning you can shift from leveraged mode to normal delivery mode if you want to hold long-term. (Groww)
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Better transparency: Groww now shows detailed breakdowns — how much capital you invested, how much is borrowed, interest charged — making it easier to track profits/losses. (Groww)
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You can place After Market Orders (AMO) for MTF — i.e., place orders even when markets are closed, queued for next trading session. (Groww)
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Interest tracking has become simpler and more transparent. (Groww)
These updates make MTF more flexible and user-friendly — but still carry the same inherent risks of leverage.
Should You Use MTF? When It Makes Sense (and When to Avoid)
MTF might make sense if:
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You expect a strong short-term upward movement in a stock.
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You have a high risk appetite and can monitor the market.
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You understand the interest and potential margin calls, and are mentally prepared for possible losses.
MTF may not be suitable if:
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You plan to hold long-term without active monitoring — because interest costs + potential volatility can erode gains.
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You’re a beginner investor without much experience with market swings.
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You cannot afford losses beyond a certain threshold or prefer conservative investing.
In many cases, for long-term investing or mutual fund SIP style investing, a regular “delivery-based” approach may be safer than using MTF.
Conclusion — MTF Is Powerful, But With Caution
On Groww, MTF (Margin Trading Facility) is a tool that gives you extra buying power — letting you buy more stocks than you could with your own money. However, this leverage is a double‑edged sword: while gains can be amplified, so can losses.
If you use MTF, do so with full awareness: carefully check interest costs, margin requirements, the stocks you pick — and be prepared for volatility. For many retail investors, especially beginners or long‑term investors, traditional investing methods may be safer and more suitable.
MTF is not a shortcut to easy profits — it’s more like a power tool: useful when you know what you’re doing, risky when you don’t.