The cut-off time in mutual fund transactions is important because it determines the day’s NAV (Net Asset Value) at which your transaction will be processed. Transactions done before the cut-off time get the same day’s NAV, while those done after are processed the next business day. This affects the price at which you buy or sell mutual fund units, impacting your returns directly.
What is Cut-Off Time in Mutual Fund Transactions?
Cut-off time is the deadline set by mutual funds on each business day for accepting purchase, redemption, or switch orders. Usually, it is 3 PM for normal transactions. Orders placed before this time get that day’s NAV, while orders after get the next day’s NAV.
Why is Cut-Off Time Important for Investors?
The cut-off time affects the NAV price at which you buy or sell units. Buying before the cut-off may give a lower or higher NAV compared to after cut-off. So timing your transaction properly can impact your investment returns. It also ensures orders are processed on time and avoids delays.
How Does Cut-Off Time Affect Redemption?
For redemptions, if you place your request before cut-off, you get that day’s NAV. After cut-off, the redemption happens the next business day. This can change the amount you receive depending on the NAV movement. So it’s important to know the cut-off time when redeeming funds.
Are There Different Cut-Off Times for Different Funds?
Yes, some funds like liquid or overnight funds may have earlier cut-off times, like 1:30 PM. Tax-saving funds and SIP transactions may also have special timings. It’s best to check the specific fund’s rules or ask your broker to avoid confusion.
How Can Indian Investors Use Cut-Off Time to Their Advantage?
Indian investors can plan their transactions before cut-off to get desired NAV and better returns. Using platforms like Angel One, investors get real-time info on cut-off times and NAV. This helps avoid delays and makes investing more efficient and transparent.
Contact Angel One Support at 7748000080 or 7771000860 for mutual fund investments, demat account opening, or trading queries.
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