How to redeem your units

To take money out of a mutual fund you redeem — you sell units back to the fund and it pays you their value in cash. There is no need to find a buyer; the fund itself buys the units back at their NAV. The whole process is a request, a price and a settlement, and knowing how each works removes the anxiety from a first withdrawal.

How to place a redemption

You can redeem online through the platform you invested with, through the registrar that keeps the fund’s records, or with help from your distributor. You choose whether to redeem a specific rupee amount, a specific number of units, or everything, and you can usually redeem part of a holding and leave the rest invested. The request is against a specific scheme and folio, so those details need to match your records.

Which day’s NAV you get

A redemption is priced at a single day’s NAV, decided by when your request is received relative to the daily cut-off time — before the cut-off gets that day’s NAV, after it the next business day’s. You cannot watch the NAV tick and time the sale; there is one price a day, struck after the market closes. To see the most recent published NAV for your scheme, use our AMFI NAV lookup.

When the money reaches your bank

Settlement takes a few working days after the priced day, and how many depends on the type of scheme — money in liquid and overnight funds comes back fastest, equity funds take a little longer, and weekends and holidays extend the wait. The money is credited to the bank account registered on the folio, which is why keeping that account current matters. If you need cash by a set date, count business days back from it and redeem with a day or two to spare.

What a lock-in or exit load can hold back

Two things can reduce or block a redemption. A exit load is a charge for redeeming within a stated period, deducted from your proceeds. A lock-in stops you redeeming at all until a period has passed — an ELSS, for instance, cannot be redeemed during its three-year lock-in, counted from each instalment. Check both before you count on the money, because they change what you can take out and when.

Redeeming is a taxable event

Selling units realises any gain or loss, so a redemption is when tax on an equity fund is triggered — the mechanism is in how equity funds are taxed. It is worth knowing before you redeem a large amount, because the timing of a sale can fall in one tax year or the next. This is the mechanism, not tax advice.