Mutual fund redemptions due on October 30 will be settled on Monday, November 2

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Investors often park their money in overnight funds, liquid funds and ultra short-term funds as an alternative to their savings account, in the belief that it will be available to them at short notice. Many, however, fail to account for bank holidays during a calendar year. These holidays delay the credit of redemptions from mutual funds into investors’ bank accounts. On account of a settlement holiday today, on October 30, mutual fund orders in debt and liquid schemes placed today i.e., 30th October will be processed on Monday, 2nd November.

The holiday today is on account of ‘ Eid e Milad.All redemptions due on Friday, 30th October will be settled on Monday, 2nd November.

Some mutual fund houses have started providing instant redemption facility, on the same day upto a certain amount, however usually, the redemption from liquid funds works on a T+1 basis. In other words, if you give the redemption today (on a weekday on which the market is open), you will get the redemption tomorrow. However a public holiday or weekend can delay the payout. In addition, the request must be given before the cut-off time on a working day in order for it to be processed the same day. Sending the redemption request after the cut off time adds another day to the payout time.

Effective from October 19, here are the cut-off timings for applicability of NAV for various categories of schemes

> Liquid and overnight mutual funds

— cut off timing in case of subscription ( purchasing a mutual fund) : 12:30 p.m.

— cut off timing in case of redemption ( selling a mutual fund) : 1:00 p.m.

> Debt mutual fund schemes and conservative hybrid fund, other than liquid and overnight funds

— cut off timing in case of subscription ( purchasing a mutual fund) : 1:00 p.m.

— cut off timing in case of redemption ( selling a mutual fund) : 1:00 p.m.

> Equity mutual funds and all mutual fund schemes other than those mentioned above

— cut off timing in case of subscription ( purchasing a mutual fund) : 3:00 p.m.

— cut off timing in case of redemption ( selling a mutual fund) : 3:00 p.m.

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