Mutual Fund Cut Off Time and Applicable NAV on Rupeezy

The Net Asset Value (NAV) plays a very important role in mutual fund investing. Just like the price of a stock, the NAV of a mutual fund helps you understand the price that you will be paying for 1 unit in that mutual fund. This NAV is computed on a daily, monthly basis or as per the fund specifications. But have you ever wondered what NAV is being allocated to your mutual funds, how is this computed and on what date is this computed? In this article will have a closer look at all these aspects so keep reading to find out more!

What is the NAV? How is the NAV computed?

The Net Asset Value is computed after calculating the sum of a mutual fund's assets minus its liabilities which is then divided by the number of mutual fund units. This amount gives us the amount that an investor will have to pay per unit to invest in this fund. 

However, the date and time at which this is calculated also have an effect on the NAV at which you purchase units or sell units in a mutual fund. Let's understand this better.

What is the Mutual Fund Cut Off Time for NAV?

According to the SEBI circular dated September 2017, mutual fund investors are to be given the NAV on the same that they place the trade. This means that the NAV that your trade will placed under will depend on the day of realisation of funds by the Asset Management Company (AMC). 

This was introduced by the SEBI to ensure uniformity in the applicability of the NAV across various mutual fund schemes. However, this also includes another metric that determines if your investment is eligible for that day's NAV and i.e. cut-off timings. 

These cut-off timings for mutual funds are predefined to identify when the funds were realised by the AMC. If an investor invests before the cut-off time then the AMC will realise the funds on the same day and you will be allocated units based on the same days' NAV. This was later implemented by the SEBI on the same day. 

But what happens if an investor misses the cut-off timing? If the cut-off timing deadline is missed by an investor then the AMCs will accept the order but the NAV applicable will be that of the following trading day. However, these cut-off timings may vary across different mutual funds.

Check out our articles on how mutual funds work in India, the various mutual fund houses in India, and the best app for mutual fund investments to make informed investment decisions!

NAV Applicable for Mutual Funds Orders on Rupeezy

When you place a lump sum or an SIP order on Rupeezy, your funds are transferred directly to the Indian Clearing Corporation ( ICCL ) via a payment aggregator. The NAV allocated is based on the date and time ICCL receives the funds. 

This is applicable for both the payment options i.e. UPI and NetBanking which are offered on Rupeezy for your convenience. However it is important to note that the cut-off timings also play a role when it comes to determining the cut-off timings for your NAVs. 

The cut off time for mutual fund investment orders vary based on the type of mutual fund and the payment you use to buy.  The cutoff time to invest in Liquid and Overnight schemes is 12:30 PM, whereas the cut off time for equity mutual fund purchases and other funds is 2:00 PM when paid via UPI on Rupeezy.

Below are the complete details of cut-off timings of mutual funds investments which depends on the category of mutual fund and the payment that you use to invest.

Non-Liquid/Overnight Mutual Funds like Equity, Debt, Hybrid, etc.

*T day stands for Today,  T+1 is the day after today

Liquid and Overnight Mutual Funds

Note: Below is the list of supported banks for direct and non-direct settlement banks

Now let's have a look at the mutual fund redemption cut-off time.

The cut-off time for redemption orders is 3:00 PM. The NAV of T day will be applicable for redemption orders placed within the cut-off time. Exit load applicable for redemption can be checked on the Scheme Detail page of Rupeezy.

Conclusion

Understanding what the NAV is how it is calculated for your orders is useful as it can avoid confusions that arise due to failure to meet cur-off times as investors would tend to expect the same day NAVs. Happy Investing!

Frequently Asked Questions

Q. Can I receive the redemption in my secondary bank account?
Ans: While you can use multiple bank accounts to invest in mutual funds, redemption amount is always sent to your primary account in Rupeezy.

Q. Does Rupeezy decide the cut-off timings of Mutual Funds?
Ans: Cut Off Timings are decided by the payment aggregator and the exchange platform Rupeezy leverages for investment. If the payment aggregator reports fund after above mentioned cut off time you will get next trading days NAV.