Switching mutual fund schemes means moving your investment from one mutual fund scheme to another scheme within the same fund house. This process allows you to adjust your investments based on your changing financial goals or market conditions without withdrawing money from your account. It involves selling units in your current scheme and using that money to buy units in the new scheme. The switch is easy and quick, and you can do it either online or through your mutual fund distributor. Switching helps you make your portfolio more balanced or aligned with your risk level.
What Does Switching Mutual Fund Schemes Mean?
Switching mutual fund schemes means transferring your money from one scheme to another scheme in the same mutual fund company. This does not mean you are withdrawing money; your money stays invested but in a different scheme. For example, if you want less risk, you can switch from an equity fund to a debt fund. Or if you want more growth, you can move from a debt fund to an equity fund. This helps you keep your investments in line with your needs. It is a simple way to change your investment plan without selling your units and investing again separately.
How to Start the Switching Process?
You can start switching by logging into your mutual fund account online or using the fund house app. Find the 'Switch' option in the menu. Select the scheme you want to leave and the scheme where you want to move your money. Enter the amount or units you want to switch and confirm your request. You can also do this offline by submitting a switch form to your distributor or mutual fund office. After your request is accepted, the mutual fund company will sell your units in the old scheme and buy units in the new scheme using that money. This process usually takes 1 to 3 working days.
What Documents Are Needed for Switching?
Normally, you don’t need to submit new documents if your KYC (Know Your Customer) is already done. You just need to have your mutual fund account or folio number ready. If you are switching through a distributor, they might ask for your PAN card and KYC details if not updated before. It is important to keep your KYC up to date to avoid any delays in the switching process. Having complete and updated KYC means you can switch your schemes quickly and smoothly.
Are There Any Charges for Switching Mutual Funds?
Some mutual funds charge a small fee called exit load if you switch within a specific period after investing. For example, if you switch before one year, you may have to pay a small charge. Apart from exit load, you may have to pay capital gains tax on the profits earned from your current scheme. But switching within the same fund house is usually cheaper and simpler than selling and buying funds from different companies. It’s always good to check the terms and conditions of the schemes before you switch. This will help you avoid unexpected charges.
How Long Does the Switching Take?
After you submit your switch request, it usually takes 1 to 3 working days to complete. The switch happens at the Net Asset Value (NAV) declared on the day your request is processed. Once the switch is done, you will receive a confirmation from the mutual fund company. You can check your updated portfolio online or by contacting your distributor. It is important to track your switch until it is completed to avoid any errors. Quick switching helps you stay updated with your investment plans.
Can I Switch Mutual Funds Online in India?
Yes, switching mutual fund schemes online is very common in India now. Most fund houses and investment platforms provide an easy online switch facility. You just need to log in to your account on their website or app. Select the 'Switch' option, choose the schemes, enter the amount, and submit. Online switching is safe, fast, and saves time. It also helps you avoid paperwork and visit to the fund house. This option is very helpful for investors who want to manage their portfolio from home.
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