Mutual fund cut-off time: which day's NAV you get and when units are allotted

For most mutual funds, the cut-off is 3:00 pm on a business day, and it counts when your money reaches the fund, not when you tap Buy. If the money is in the scheme's account by 3:00 pm, you get that day's closing NAV (the price of one unit of the fund). Otherwise you get the next business day's NAV. A sale request in by 3:00 pm gets that day's NAV. Liquid funds and overnight funds work differently. Liquid funds are debt funds that hold securities maturing within 91 days, and overnight funds hold securities maturing in one day. For both, money in by 1:30 pm gets the NAV of the day before.

What is the mutual fund cut-off time?

The cut-off time is SEBI's "outer limit of timing within a particular day which is relevant for determination of the NAV applicable".

Two terms matter here. A business day, in SEBI's rules, does not include a day on which the "Money Markets are closed or otherwise not accessible". The cut-off is measured against the time your application is stamped at an official point of acceptance. That is a place where a fund house takes applications.

International schemes, meaning those with substantial investments in foreign securities valued on other time zones, are outside these cut-offs. So are units bought or sold on a stock exchange. The international funds page explains that group.

A new fund offer, when a scheme first collects money, has its own allotment timeline.

When will my units be allotted?

Your units are priced at the NAV of the day your money reaches the fund. The fund house must confirm the allotment within five working days. Allotment means the fund house gives you the units your money has bought.

The number of units is your amount, after stamp duty, divided by that NAV. A small stamp duty is deducted from each purchase, so slightly fewer units are bought. SEBI's rules set the price you pay for a unit at the NAV that applies, with no entry load for any scheme.

You can hold units in a statement of accounts or in demat form, and SEBI's regulations say they are credited immediately upon allotment. A demat account holds them electronically. Confirmation comes by email or SMS, not later than five working days after your request. A consolidated account statement is issued by the 15th of the next month. It covers every month in which you had a transaction, including instalments of a SIP (systematic investment plan, which invests a fixed amount at regular intervals).

Units can seem late for these reasons:

• Your money reached the scheme after the cut-off, or on a non-business day, so a later NAV applies.
• The NAV is not out yet. Most funds must publish it by 11 pm that day.

Payment route also matters. AMFI's guide gives indicative days for units to be allotted. Counting T as the day of application:

• UPI, IMPS, RTGS and NEFT: allotment on T.
• Net banking: T at the nine banks AMFI lists, T+1 at other banks.
• A bank mandate (NACH, the usual SIP route): T+2.
• Cheque: T+3.

Which day's NAV do you get when you buy?

You get the NAV of the day your money is available to the scheme, provided that happens before the cut-off. SEBI's rule gives you the NAV only if two things happen before the cut-off. The application must be received. The funds must be credited to the scheme's bank account and "available for utilization by the scheme". The money must be available "without availing any credit facility whether intra-day or otherwise".

Outside liquid and overnight funds, the closing NAV of that day applies "irrespective of the size and time of receipt of such application". The 3:00 pm deadline is for the money.

Here is a made-up example. You place a ₹20,000 purchase in an equity fund (one that invests in shares of companies) at 2:40 pm on a Monday, a business day.

• If the money is credited to the scheme's account by 3:00 pm, you get Monday's closing NAV.
• If it is credited on Tuesday morning, you get Tuesday's.
• At an assumed NAV of ₹48, ₹20,000 buys about 416.67 units (20,000 divided by 48), before stamp duty.

Your money does not sit with a middleman. For platforms other than stock exchanges, SEBI's rules say subscription money is credited directly from your account into the scheme account without any intermediate pooling.

A fund's NAV level, high or low, does not tell you whether the fund is cheap. How important is NAV when choosing a mutual fund? covers that.

What are the cut-off times for liquid and overnight funds?

For liquid and overnight funds, money in by 1:30 pm on a business day gets the NAV of the day before the day of receipt. Fund houses calculate these funds' NAV for every calendar day, and for all other schemes only for business days.

Take a made-up case. Your money reaches a liquid fund by 1:30 pm on a Wednesday. You get Tuesday's NAV, the day before receipt. The other purchase rows in the table above cover applications or money arriving after 1:30 pm.

Because liquid funds have a NAV for weekends and holidays, money put in before a holiday earns for those days. Other funds, which calculate a NAV only on business days, have none for those days.

Selling follows its own rule. A request by 3:00 pm gets the NAV of the day before the next business day. For an overnight fund, a request received online has until 7:00 pm. After the deadline, the next business day's NAV applies.

There is one faster route. The Instant Access Facility pays redemption (sale) proceeds the same day, online only, in liquid and overnight schemes, for resident individuals. The limit is ₹50,000 or 90% of the latest value of your investment, whichever is lower, per day per scheme.

To read more, see the liquid funds and overnight funds pages, and liquid funds vs fixed deposits.

Which NAV applies when you sell, switch or run a SIP?

A sale request in by 3:00 pm on a business day gets that day's NAV in schemes other than liquid and overnight funds. A request after 3:00 pm, or any time on a non-business day, gets the next business day's NAV.

Say you ask to redeem (sell) units of an equity fund at 2:30 pm on a Thursday. You get Thursday's NAV. SEBI's rules say the proceeds must reach you within 3 working days of the redemption. For schemes with at least 80% in permitted overseas investments, the limit is 5 working days. Any exit load, a fee some funds charge if you sell within a set time after buying, comes off the NAV: the repurchase price is the applicable NAV times one minus the exit load, if any. Exit load in mutual funds explains it. Customers can redeem units on Koshex. For the steps, read how to sell mutual funds online.

SEBI treats the switch out as a sale and the switch in as a purchase, so each side follows its own cut-off and NAV. You can switch between schemes of the same fund house on Koshex. How to switch mutual fund schemes walks through it.

Each SIP instalment is a purchase like any other. It gets the NAV of the business day its money reaches the fund before 3 pm, not necessarily the date on your mandate. AMFI's indicative table shows a bank-mandate payment debited on T+1 and allotted on T+2. One fund house's scheme document says that if a SIP date falls on a non-business day, the instalment is processed on the next business day. Systematic investment plan (SIP) covers how SIPs work.

Why does your app show an earlier cut-off time?

The fund house's deadline counts only when your order is recorded and your money has reached the fund, and payments take time to travel. An app or platform may therefore set an earlier time of its own, so that both arrive in time.

AMFI's own guide shows the gap. Take a lump sum in a scheme other than liquid or overnight. Its indicative times to get the same day's NAV run from 1:00 pm for NEFT to 2:45 pm for UPI and IMPS. RTGS is 2:30 pm. Net banking is 2:45 pm at nine named banks and 3:00 pm at the rest. Check the time the app you use states.

On Koshex, you can place investment and withdrawal orders at any time, 24/7. Orders are processed against the standard cut-off times in SEBI's rules, so an order placed after the cut-off is processed on the next business day. That applies, for example, to a debt fund investment or withdrawal.