Can I withdraw money on all days or only on certain days?

A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.

Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.

The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.

Can I withdraw money on all days or only on certain days?

An open fund allows redemptions on all working days. If a redemption request is delivered to an Investor Service Center on a non-business day or after a specified cut-off time, such as 3:00 p.m., it is processed the next business day. Repayments are processed at the net asset value (NAV) of that particular day. All redemption proceeds are credited to the investor’s bank account within a specified time, usually within 10 business days.

Refunds can be made by delivering a signed refund request that clearly mentions the folio number of the scheme. Refunds can also be made on approved online platforms, where investors have the necessary security codes.

Investments made in Equity Linked Savings Schemes (ELSS), however, have a 3-year lock-in, after which they can be redeemed on any business day.

Refunds may only be limited in extraordinary circumstances. With the approval of the Board of Directors, the AMC may impose restrictions in the event of a liquidity issue, capital market closure, operational crisis or when indicated by SEBI. It is important to note that these events are extremely rare.

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What is net asset value (NAV)?

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What kind of returns should you expect from mutual funds?