SEBI Revises Mutual Fund Cut-Off Timings

Payment Mode and Its Impact on NAV

The cutoff time for mutual fund orders varies based on both the payment method and the fund type. Importantly, the timing for determining the Net Asset Value (NAV) of a mutual fund order is directly connected to when the payment is completed. Below is a breakdown of how various payment methods affect the cut-off time:

• Please note that for payments made via net banking, the same-day NAV applies only if the payment originates from one of the listed banks above.
• If processed through other banks, the NAV will be applied on the next business day.

Cut-off Times Based on Fund Types

The deadline for placing mutual fund orders varies depending on the type of fund you're investing in. Here's how the applicable NAV for transactions under mutual fund schemes is typically determined:

Purchase Orders

• Orders placed on weekends and holidays will be processed the next business day.
• UPI payments typically provide same-day NAV if ordered before the cut-off.
• Sometimes, even if you buy before the cut-off, if funds arrive late, your order is processed the next day with that day's NAV.

Redeem Orders and SWP Orders

The deadline for placing redeemed orders is 3 pm. If you submit your redemption order before this cut-off time, you will receive:

• The NAV of the previous day for liquid and overnight funds, applicable immediately before the next business day
• The NAV of the same day for other fund types

OTP verification is now mandatory for processing your redemption or SWP orders. Without it, your order will not be forwarded, and the NAV applied will be based on the completion time.

What do Cut-Off Timings mean in Mutual Funds?

Many investors confuse trading hours with cut-off timings. Trading hours are when you can buy or sell mutual fund units, while cut-off timings determine the NAV used for these transactions. The cut-off time varies by fund type.

For all funds except liquid funds, buying before the cut-off means receiving that day's NAV.

In September 2020, SEBI added a rule: to get the same day’s NAV, your money must reach the AMC on the same day. If you transacted before the cut-off but the money didn't reach the fund, you'll get the next day’s NAV.

FAQs

What is the cut-off time for liquid fund purchases?

The cut-off time for both liquid funds and overnight funds is no later than noon. Orders and payments made before this cut-off time will get the NAV of the previous day.

If I use UPI, will I get same-day NAV?

Yes, your UPI transaction must be completed successfully before the cut-off time, and you will get the same-day NAV.

Is same-day NAV offered by all banks when paying by net banking?

No, only certain banks have the same-day NAV. ICICI Bank, HDFC Bank, SBI, Axis Bank, and Kotak Mahindra Bank are the only banks that qualify for same-day NAV.

What is the cut-off time for purchases of equity or debt funds?

The cut-off time for purchase orders for equity and debt funds is 2:00 PM, meaning orders placed before this time will get the same-day NAV.

What happens if the OTP verification fails for redemption orders?

If the OTP verification is not completed before 3:00 PM, the NAV of the next relevant business day will be used.