Redeeming a mutual fund means selling your units and receiving the money in your bank account. It’s a common process that allows investors to exit their investments whenever they choose. But many wonder, can I withdraw money from a mutual fund anytime? 

While most open-ended mutual funds allow flexible withdrawals, the timing plays a crucial role in determining which Net Asset Value (NAV) you receive. The mutual fund redemption NAV cut-off time is the deadline that decides whether you get the same day’s NAV or the next day’s. 

Additionally, understanding the mutual fund withdrawal time is important to estimate when the funds will actually reach your account. Factors like weekends, public holidays, and fund house processing speed can affect the timeline.

So, let’s understand what redemption in a mutual fund is and how the entire process works.

Understanding Mutual Fund Redemption

Redemption in mutual funds is the process of selling your existing units to receive the invested amount based on their current value. It allows investors to convert their investments into cash based on the applicable NAV. 

A key factor influencing this is the mutual fund NAV timing, which refers to when the NAV is calculated and applied to your redemption request. This timing directly affects the value you receive.

Another important aspect is the mutual fund investment time, especially when planning redemptions in coordination with broader portfolio goals. Redeeming at the right time can help you avoid delays and align with your cash flow needs.

Some of the key features of mutual fund redemption are:

  • No paperwork for online redemptions
  • Processed only on business days
  • Funds are usually credited within 1–3 working days

Types of Mutual Fund Redemption

When you plan for the redemption, there are various options for you. So, let us now explore the common ways of selling mutual funds:

  • Unit-based redemption: You specify the number of units you want to redeem, and the payout is based on the current NAV for those units.
  • Amount-based redemption: You specify the exact amount you wish to withdraw, and the system calculates how many units need to be redeemed to match that amount.
  • Full redemption: You redeem all your units in a mutual fund scheme, liquidating your entire investment in that fund.
  • Partial redemption: You withdraw only a portion of your holdings, keeping the rest invested.
  • Systematic Withdrawal Plan (SWP): You set up automatic, regular withdrawals (monthly, quarterly, etc.) for a fixed amount or number of units, ideal for generating a steady income.
  • Redemption due to scheme maturity: In close-ended funds, all units are automatically redeemed by the fund house when the scheme matures.
  • Switch Option: It lets you move your investment from one scheme to another within the same fund house. It involves redeeming units from one scheme and reinvesting the amount into another. This is often used in an STP strategy.

Redemption Timings for Mutual Funds

Redemption NAV is assigned based on when the request is placed and the type of fund involved. Here’s a breakdown of mutual fund NAV allocation time:

1. Overnight and Liquid Mutual Funds

  • Online redemption: The new mutual fund cut-off time is 7:00 PM. Requests placed before this time on a business day get the same day’s NAV.
  • Offline redemption: The cut-off remains at 3:00 PM. Requests received after 3:00 PM receive the next working day’s NAV.

This change benefits investors using liquid funds for short-term or emergency needs.

2. Normal Mutual Funds (Equity, Debt, Hybrid, Index Funds)

  • The cut-off time for both online and offline redemptions is 3:00 PM.
  • Requests received before 3:00 PM receive the same day’s NAV.
  • After 3:00 PM, the NAV of the next mutual fund NAV date is applicable.

Investors must also note that the mutual fund timing for NAV allocation depends on when the money is received by the fund house, not just when the request is placed.

How to Find the Right Time to Redeem Mutual Funds?

Redemption should be a strategic decision, not an emotional one. The following scenarios will help you determine when it’s the right time to redeem your mutual fund investment.

1. Your Financial Goal Has Been Achieved

If your mutual fund investment was aligned with a specific goal, such as education, home buying, or retirement, you should redeem it once the goal is met. This ensures you lock in your gains and avoid unnecessary market risk after your objective is fulfilled. To have a better idea, you can use the SIP calculator.

2. Your Fund’s Performance Has Declined

Review fund returns in 3/5/10 years to judge consistency. If the fund has been underperforming its benchmark or peers for an extended period, it may be wise to redeem and reinvest in better options. A sustained dip in performance is a valid reason to exit.

3. You Need to Rebalance Your Portfolio

If your asset allocation has drifted from your original plan, redemption helps restore balance. For example, if equity grows too much in a conservative portfolio, consider shifting some of it using an STP strategy. This helps reduce exposure without exiting the market completely.

4. The Fund’s Strategy No Longer Fits You

Funds might undergo a change in style or management. If the changed variable doesn’t align with your overall goal, redemption might be the right step. 

5. You Need Immediate Funds

Sometimes, redemption is driven by personal needs. If you require urgent liquidity, you can redeem units. But check the cut-off time for mutual fund redemption to ensure timely processing and correct NAV allocation.

Planning redemptions based on these triggers keeps your investment aligned with your goals, reduces risk, and ensures better financial control.

Ways to Redeem Mutual Funds?

The process to withdraw your money invested in Mutual Funds is quick and easy. You can redeem your mutual funds online, using your demat account or offline, based on where and how you invested. Here’s how to do it:

1. AMC Website or App: Go to your mutual fund company’s website or app. Log in, choose the fund, and place your redemption request. If you do this before 3:00 PM, you’ll get the same day’s NAV.

2. Investment Platforms: If you used a platform like Share.Market to invest in mutual funds, just log in, select the fund, and enter the amount or number of units to redeem.

3. Registrar Sites (CAMS/KFintech): Registrars handle transactions for many AMCs. Use your PAN or mobile number to log in, pick the fund, and submit the redemption.

4. Offline Mode: Download the redemption form from the AMC website or visit a nearby branch. Fill it out and submit it before 3:00 PM to get the same day’s NAV.

5. Automatic Redemption: For close-ended funds like FMPs, you don’t need to do anything. The AMC automatically redeems the fund and credits your account on maturity.

Conclusion

Redeeming mutual funds is not just about exiting an investment; it’s about doing it at the right moment. Knowing the mutual fund redemption days helps you plan since redemptions are processed only on working days, not weekends or holidays.

Equally important is the NAV allotment time, which decides which day’s NAV you will get. Even a small delay in placing your request can shift your NAV to the next business day, affecting your returns.

Platforms like Share.Market makes this process easier with smooth digital access and real-time tracking. With the right tools and timing, redemption becomes a smart financial move, not just a routine transaction.

FAQs

1. Can I Withdraw Money From a Mutual Fund at Any Time?

Yes, most mutual funds allow you to withdraw anytime unless the scheme has a lock-in. Timings matter, though. If you submit a request after the mutual fund sell cut-off time, you will get the next business day’s NAV.

2. Can I Buy a Mutual Fund on Saturday?

You can place a purchase request on Saturday, but it will not be processed until the next working day. The mutual fund investment time only applies on business days, so NAV will be applied based on Monday’s processing.

3. Can I Sell a Mutual Fund Anytime?

Yes, you can place a redemption request anytime online. However, it will only be processed on business days. If you submit it after the mutual fund closing time, you’ll receive the next day’s NAV.

4. Is There a Penalty for Early Redemption?

Some funds impose an exit load if you redeem units within a specified period, often within one year. Additionally, short-term capital gains tax may apply. Always review your fund’s terms before redeeming.

5. How Long Does it Take to Receive Funds After Redemption?

The mutual fund withdrawal time varies by fund type. Equity funds typically take 1-3 business days, while liquid and overnight funds may process within 1-2 business days.

6. What is the NAV Date in Mutual Fund Redemption?

The NAV date in a mutual fund is the date on which the applicable NAV is calculated for your transaction. If your redemption request is submitted before 3:00 PM on a working day, that day’s NAV is applied. Requests after 3:00 PM get the NAV of the next working day.

7.  What Happens to Mutual Funds During a Market Crash?

In a mutual fund crash, the NAV of your fund may drop due to falling stock or bond prices. It’s important to avoid panic-selling and review your investment strategy instead of reacting to short-term market movements.

8. What are Mutual Fund Redemption Days?

Mutual fund redemption days are Monday to Friday, excluding public holidays. Requests placed before 3:00 PM on these days get the same day’s NAV. Requests after 3:00 PM or on weekends/holidays are processed on the next working day.

9. What is Mutual Fund Switch Time?

Mutual fund switch time refers to the cut-off timing when switching units from one scheme to another within the same AMC. The standard cut-off is 3:00 PM. If the switch request is placed before this time on a business day, both redemption and new purchase are processed with the same day’s NAV.