How to redeem a mutual fund
Redeeming takes a few minutes online. For most funds the money reaches your bank within three working days.
Updated 23 Oct 2026 · 2 min read
To redeem is to sell units back to the fund. The fund pays you the NAV that applies to your request, less any exit load, into a bank account registered in your folio.
How to redeem
- Sign in to the fund house's website or app, MF Central or the website of the registrar that serves the fund (CAMS or KFintech).
- Choose Redeem on the fund you want to sell.
- Choose all units, a number of units, or an amount in rupees.
- Check the bank account the money will be paid to.
- Confirm with the OTP sent to your registered mobile or email.
Units are sold in the order you bought them, oldest first.
Cut-off times
The cut-off for a redemption is 3 pm on a business day, for liquid funds as well. Overnight funds take online redemption requests until 7 pm. For most funds, a request in before the cut-off gets that day's NAV and a later one gets the next business day's. The earlier 1:30 pm cut-off for liquid and overnight funds applies to purchases.
When the money arrives
The fund house has to pay within three working days of the redemption date. For schemes with at least 80% of their money invested overseas, the limit is five working days. Liquid and overnight fund redemptions are usually paid the next working day.
Some liquid funds also offer instant redemption: up to ₹50,000 a day or 90% of your holding in the scheme, whichever is lower, paid to your bank within minutes. It is open to resident individuals, and not every fund offers it.
Exit load
Some funds charge an exit load, a percentage of the value of units sold within a set time of buying them. A common example is 1% on equity fund units held less than a year. Liquid funds charge a small exit load on units held less than seven days. The load is deducted from the amount paid out, and each fund page here shows the fund's terms.
ELSS lock-in
Each ELSS purchase is locked in for three years. For a SIP, every instalment has its own three years, so the units become free to redeem one month at a time. See ELSS and tax saving.
Tax
A redemption is a sale, so any gain is a capital gain in that financial year. No tax is deducted for resident investors; you pay it when you file your return. How mutual funds are taxed has the rates.
Questions
Can I redeem part of my holding?
Yes. Enter a number of units or an amount, and the rest stays invested.
Why did I receive less than the value shown when I placed the request?
The value shown uses the last published NAV. The redemption is priced at the NAV that applies to your request, and any exit load is deducted.
Can the money go to a bank account that is not in my folio?
No. It is paid only to a bank account registered in the folio. Add the account first if you want to use a new one.
Each fund page has its returns, risk, costs, managers and everything it holds.
This guide explains how things work. It is not investment, tax or legal advice. Rules change; check the fund house's documents, and a qualified adviser for your own case.