The cut-off timings of mutual funds

Mutual funds have specific cut-off timings which an investor has to take into account while submitting application and making payments. The fund house determines the NAV at which the investor gets the units of the scheme depending on the time of submission of the application and payment made. These cut-off timing rules have been laid down by Securities & Exchange Board of India.

According to these rules, an investor investing in liquid fund should submit the application and make payment before 2 p.m. to get the units at the previous day’s NAV. If an investor submits the application and makes payment after 2 p.m., he/she will get the units of the scheme at the NAV of the same day.

In the case of equity and debt funds, the investor has to submit the application and transfer funds into the mutual fund account by 3 p.m. to avail NAV of the same day. If the investor submits the application and makes the payment after 3 p.m., he/she will get the units of the scheme at the NAV of the next day.

Of course, the difference between the same day’s NAV and the previous day’s NAV or the next day’s NAV may be miniscule (plus or minus few paise), so you need not worry too much about the deadline. Also, since MF investment is generally for the long term, this minor difference may not matter so far as returns over the long term are concerned. However, if you are buying units of a liquid fund or if the amount is substantial, it would be advantageous to keep the deadline in mind before investing.