Redemption of equity mutual funds to be faster

With Indian equity markets moving to T+1 settlement cycle for all stocks, mutual funds too will pass on this benefit to unit holders, with money now coming in a day early for equity oriented mutual fund schemes.

How would equity mutual fund investors benefit on account of the changes in the settlement cycle in equity market?
With the Indian equity market moving to the T+1 settlement cycle for all stocks, beginning Feb 1, it will take a day less for equity-oriented mutual fund investors to get redemption proceeds in their bank accounts. This means all asset management companies (AMCs) will now move to T+2 redemption payment cycles for all equity-oriented mutual fund schemes. So earlier when you placed a redemption request before the cut-off time on Monday, you would get money on Thursday in your bank account. With the new system, you will get the money a day earlier — on Wednesday.

Will there be any change for overnight funds, liquid funds or other debt oriented schemes? how long does it take to get redemption proceeds in such schemes?
There is no change in redemption rules for liquid and debt oriented schemes. Redemption proceeds for such schemes will be paid in one/ two working days.


What is the process to redeem mutual fund units?
Units that you hold in an open-ended scheme can be sold partially or fully. A request can be submitted to the fund house on any business day. If you want to do it in the physical mode, fill in the requisite transaction slip, which can be downloaded from the fund house website or detached from the bottom of your account statement. The redemption application can be submitted at the fund house office or any of the official points of acceptance of transactions, across the country. However, most investors prefer to transact digitally now due to convenience offered, where one can place a request online through the fund house website or app. Requests can also be made online through the registrar, or through any other third-party online portal.

What is the amount that an investor will get when a redemption request is placed?
The amount that will come to you is the number of units you hold on the day multiplied with the day’s NAV of that particular scheme. However, it will be subject to any exit load that is levied by the scheme.