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How to Redeem Mutual Funds in 2023

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Created on
May 24, 2023

Summary

What’s Inside

Investing in mutual funds is an efficient method to attain long-term financial objectives such as retirement planning, saving for your kid's education, marriage, or establishing a passive revenue source. However, understanding the process of mutual fund redemption is just as vital as investing in them. Redeeming mutual funds is an essential step in achieving your investing goals and should be approached with caution. 

What is Mutual Fund Redemption?

The procedure of withdrawing your investment from a mutual fund scheme is called mutual fund redemption. Depending on the investor's requirements, partial or complete redemption of a mutual fund may be done. That transaction may be valid for a number of reasons, including a sudden financial need, withdrawing profits, or rebalancing your investment portfolio.

How to Redeem Mutual Funds in 2023

Below is the detailed process on how to redeem mutual funds online in a jiffy.

Step 1: Log in to your Mutual Fund Account

Log in to your mutual fund account using your login credentials to redeem your mutual funds. Ensure you have the relevant information on hand, such as the name of the mutual fund scheme, the number of units to be redeemed, and so on.

Step 2: Choose the Mutual Fund Scheme to Redeem

After you've logged in, proceed to the 'Redeem' option under the 'Transactions' tab. Choose the mutual fund scheme you wish to redeem from the list of projects you have invested in.

Step 3: Enter the Redemption Amount

Enter the amount you want to redeem after choosing the mutual fund plan. Before inputting the redemption amount, make sure to verify the investment's current value.

Step 4: Choose the Redemption Mode

You have the option of redeeming through cheque, electronic transfer, or direct credit to your bank account. Select the mode that is easiest for you.

Step 5: Submit the Redemption Request

After reviewing all the details, submit your redemption request. Within a few business days after your redemption request has been approved, the money will be credited to your bank account.

Factors Affecting Mutual Fund Redemption Time

The following are the details about the factors affecting mutual fund redemption time

1. Type of Mutual Fund

The redemption period may vary depending on the kind of mutual fund you have invested in. Unlike closed-ended funds, open-ended mutual funds are often more liquid and have faster redemption times.

2. Redemption Mode

The method of redemption you select might also impact the time it takes to redeem a mutual fund. Compared to electronic redemption methods such as NEFT or RTGS, cheques or demand drafts may take longer to get the funds.

3. Mutual Fund House Policies

The mutual fund house's policy also influences the redemption time. Some mutual fund companies may impose a holding time before redemption, which might cause the redemption procedure to be delayed.

Conclusion

Redeeming mutual funds is a vital phase towards accomplishing your investing goals and should be done carefully. You may conveniently track and save your mutual fund investments using online investing platforms such as Fi Money.
Mutual Fund investments on Fi are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 900 direct Mutual Funds. Plus, Fi's 100% secure as it functions under the guidance of epiFi Wealth, a SEBI-registered investment advisor. To help simplify the steps involved, you can invest daily, weekly, or monthly via automatic payments or SIPs — created with one screen tap. Moreover, Fi offers 100% flexibility with zero penalties for missed payments. 

Frequently Asked Question

1. How long does mutual fund redemption take?

The amount of time required to redeem a mutual fund can change based on several variables. A few notable ones are the mutual fund type, the method of redemption, the time of the redemption request, and market circumstances. However, it may usually take 1-3 working days to get the amount credited to your bank account.

2. Can I redeem mutual funds anytime?

Yes, you can redeem your mutual funds anytime. However, specific mutual fund companies may impose a holding term before redemption. It is a cooling-off period after acquisition, which may limit redemption to a particular time frame.

Disclaimer

Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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