Investment Subscriptions

Once you have created an account online or filled up the subscription application form for investing in a mutual fund scheme of your choice, you need to submit the application form online or offline as the case may be. The payment for investment can be made online in case of online submission or by cheque for an offline transaction. The units in the selected scheme will be allotted as per defined timeline in line with the cut off timings for subscription depending on the precise time when the application has been submitted and the funds have been realised by the AMC. You will be notified by email /SMS regarding the allotment of units.

Switching

Switching refers to shifting of investment wholly or partially from one scheme to another within the same fund house. For lock in periods switching is not allowed.

Switch in means entering in a scheme and switch out means moving out from a scheme. If an investor request for switching by filling the switch form, the requested units will first be redeemed from the source scheme (Scheme from which moving out) and then units will be purchased in the target scheme (Scheme in which entering).

A request for switch can be made by filling a switch form or writing a letter specifying the switch details. Investor should specify the name of the mutual fund scheme, plan and option from/to where the units are to be switched.

Systematic Transfer Plan (STP)

Under this plan, A fixed amount at a fixed periodicity, as instructed by the investor, is transferred from one scheme (known as source scheme) to another scheme (known as target scheme) of the same mutual fund. Effectively it is a Systematic Withdrawal (SWP) for the source scheme and Systematic Investment (SIP) in target scheme.

 Exit loads and taxes will applyon the first leg of plan i.e., withdrawal leg. Investors can use STP as a good and convenient tool for rebalancing the portfolio or for booking profits in a volatile market.

Redemption

Redemption of units in mutual fund refers to withdrawing from the fund. To initiate the redemption process, the unit holders have to submit a duly signed Redemption Request form to the AMC’s or the Registrar’s designated office or through the authorized online platform. The proceeds from the redemption will be credited to the registered bank account of the unit holder.

The redemption proceeds have to be paid or used for switch in transaction within a defined time frame by the Mutual Fund. This time frame is denoted as T, T+1, T+2etc.T stands for transaction date, thereforeT+1 means Transaction Day plus one business day. It means if a transaction takes place on a Tuesday, settlement must occur by Wednesday. Similarly, T+2 stands for a transaction occurring on a Tuesday will be settled by Thursday.

Payment modes

Cut off Timings

There is a uniform prescribed cut off time for submitting the request of purchase, redemption or switch of mutual fund units at the official point of acceptance. This ascertains the NAV to be applied to purchase, redemption or switch. All transaction requests are submitted at the official Points of Acceptance where time stamping is done by a tamper proof stamping machine. In case of online transaction, the time of web server is considered as the time of punching.

It is very important for every investor to know that the units are allotted at the NAV of the business day on which the funds are received into the mutual fund account before applicable cut-off time.

Therefore, they should ensure the availability of funds in the mutual fund account before the cut off time on the day they want the NAV applicable.

The prevailing cut off timing is given in the below shown table:

Type of SchemesTransaction typeCut-off timings
Liquid Funds & Overnight FundsSubscription (including Switch-in from other schemes)1:30 p.m.
Liquid Funds & Overnight FundsRedemption (including Switch-in from other schemes)3:00 p.m.
All other schemes (other than Liquid Funds / Overnight Funds)Subscription (including Switch-in from other schemes)3:00 p.m.
All other schemes (other than Liquid Funds / Overnight Funds)Redemption (including Switch-in from other schemes)3:00 p.m.

Note: Cutoff timings may change from time to time as per SEBI guidelines.

Nomination in Mutual Funds