Redemption — Mutual Fund Term Explained

Selling mutual fund units back to the fund house. Proceeds credited to your bank in T+1 to T+3 business days.

Redemption is the process of selling your mutual fund units back to the AMC. Requests are processed at the NAV of the day received (if before 3:00 PM cut-off).

Proceeds credited within 1 business day for liquid funds and 2-3 business days for equity funds.

Related terms

• Exit Load — A fee charged when you redeem mutual fund units before a specified holding period. Usually 1% if redeemed within 1 year. Nil after the lock-in.
• NAV (Net Asset Value) — The price of one unit of a mutual fund, calculated daily from portfolio value minus liabilities divided by units outstanding.
• Switch — Moving investment from one mutual fund to another within the same fund house. Treated as redemption + new purchase for tax purposes.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.