Mutual Fund Cut-Off Timings and NAV Applicability Rules
The cut-off time for purchase and redemption in most mutual fund schemes is 3:00 PM on a business day. For purchases in liquid and overnight funds the cut-off is 1:30 PM. Miss the cut-off and your transaction is processed at the next business day’s NAV.
Here is the rule that catches most investors: for purchases, the NAV you get depends on when your money is actually available for use by the AMC, not on when you placed the order. Since February 2021 this applies to every purchase amount, big or small, after SEBI removed the earlier Rs 2 lakh threshold.
So an order placed at 2:50 PM with a NEFT that credits the scheme account only next morning gets the next day’s NAV, or later.
Purchase Cut-Off Rules by Scheme Type
Equity, debt and hybrid schemes (except liquid and overnight)
If the application is received before 3:00 PM and the funds are available for utilisation by the scheme before 3:00 PM on the same day, you get that day’s closing NAV. If either condition fails, you get the NAV of the day on which both are satisfied.
Liquid and overnight funds
These allot the previous day’s NAV, because they are designed so your money starts earning from the day it lands. If the application is received before 1:30 PM and funds are available for utilisation before 1:30 PM, you get the closing NAV of the day immediately preceding the day of receipt. Apply after 1:30 PM and you get the NAV of the day before the next business day.
Redemption is simpler. There is no realisation condition, so a redemption request received before 3:00 PM on any business day, including for liquid and overnight funds, gets that day’s NAV. After 3:00 PM it moves to the next business day.
| Transaction | Cut-off | NAV you get |
|---|---|---|
| Purchase, equity or debt scheme | 3:00 PM | Same day, only if funds realised by cut-off |
| Purchase, liquid or overnight fund | 1:30 PM | Previous day, only if funds realised by cut-off |
| Redemption, any scheme | 3:00 PM | Same day NAV |
| Switch | 3:00 PM | Redemption leg same day, purchase leg on realisation |
Why Realisation Matters More Than Order Time
“Available for utilisation” means the money has reached the scheme’s collection account and is usable, not merely debited from your bank. The lag depends on the payment mode.
- UPI and net banking: usually credited within minutes, so same day NAV is realistic if you transact well before cut-off.
- NEFT and RTGS: depends on your bank’s batch timing and whether it is a banking business day.
- Cheque: clearing takes at least a day, so NAV follows clearing, not deposit.
- SIP instalments: allotted at the NAV applicable to the date the mandate debit is actually realised, which is why a bank holiday shifts your SIP NAV.
- Switches: the purchase leg waits for redemption proceeds from the source scheme, so a switch from an equity fund to a liquid fund is not instant.
Practical habit: transact before 1:00 PM for a normal scheme and before noon for a liquid fund. That leaves room for payment delays. Also remember that market holidays, weekends and RBI holidays are not business days, so a Friday afternoon order can land on Monday or Tuesday.
Redemption Payout Timelines
NAV date and money-in-bank date are two different things. SEBI has tightened the outer limit for paying redemption proceeds, and AMFI publishes best practice timelines that most fund houses beat. Typical credit timelines, counted in working days from the applicable NAV date, look like this.
| Scheme type | Typical credit | Notes |
|---|---|---|
| Overnight and liquid funds | T+1 | Instant redemption up to prescribed limits in many schemes |
| Debt funds | T+1 to T+2 | Depends on scheme and settlement of underlying |
| Equity and hybrid funds | T+2 to T+3 | Follows equity settlement |
| Funds investing overseas | T+3 to T+5 | Longer window permitted for foreign securities |
These are prevailing market practice rather than a permanent rule, and SEBI has revised the outer limits more than once. Check the current SEBI circular and the scheme information document of your fund for the exact commitment, and note that delays beyond the prescribed limit attract interest payable to you.
Frequently Asked Questions
I placed a purchase at 2:55 PM. Why did I get the next day’s NAV?
Because your funds were not available for utilisation by the scheme before 3:00 PM. The order timestamp alone does not decide NAV for purchases. Check the payment mode and the credit time in your bank statement against the scheme’s collection account credit.
What NAV applies if I redeem on a Saturday?
Saturday is not a business day for mutual funds, so the request is treated as received on the next business day and gets that day’s NAV. Weekends, exchange holidays and RBI holidays all shift the applicable NAV forward. Liquid fund redemptions follow the same business day logic.
Does the 1:30 PM cut-off apply to liquid fund redemptions?
No. The 1:30 PM cut-off applies only to purchases and switch-ins in liquid and overnight funds. Redemptions and switch-outs from these schemes follow the 3:00 PM cut-off like every other scheme.
Why does my SIP get a different NAV date each month?
The NAV depends on the date the bank debit is actually realised. If your SIP date falls on a holiday or the mandate is processed late, the allotment shifts to the next business day on which funds are realised. Your account statement shows the exact allotment date and NAV.
Is instant redemption available in every liquid fund?
Many liquid schemes offer an instant access facility with a per day per scheme limit, but it is a scheme level feature, not a universal right. Amounts above the limit follow the normal T+1 payout. Read the scheme information document for the limit and eligibility.
Key Takeaways
- Cut-off is 3:00 PM for most schemes and 1:30 PM for liquid and overnight fund purchases.
- Purchase NAV depends on funds being realised by the AMC, for every amount.
- Redemption requests before 3:00 PM get same day NAV, with no realisation condition.
- Payout usually lands T+1 for liquid, T+2 to T+3 for equity, longer for overseas funds.
- Transact well before cut-off and treat only business days as counting.
