It is possible to invest in a mutual fund (MF) on any business day. But sometimes, it may happen that you do not achieve the same day’s NAV or Net Asset Value. It depends on the time when you apply, whether you are entitled to that specific day’s NAV or not. Depending on the time, you can get a NAV of the previous day, the same day or the next day. Debt funds, liquid funds and equity funds, all have different rules regarding this.
Debt and equity funds:
The cut off time for the debt and equity funds is 3 p.m. So, in case you submit your application form before 3 p.m. you will be entitled to the same day’s NAV. Submission after 3 p.m. results in your getting the following day’s NAV. But another point that you need to keep in mind is that all these rules are applicable for the application forms that are below Rs 2 lakh.
So if you want to invest more than Rs 2 lakh, you have to make sure that you transfer your money in the account of the fund house before the cut off time. Otherwise, the time when your money gets deposited in the account will be considered the submission time, and you will get NAV accordingly.
In the case of liquid funds, you need to invest before 1.30 p.m. on a business day. You have to transfer the fund to by that time. This will entitle you to the NAV of the previous day. In case you complete the formalities after 1:30 p.m., you will be entitled to the NAV of the same day. Keep in mind that these rules do not apply to ultra-short-term bond funds. Also, if you want to invest in liquid funds, and want to achieve the desired NAV, according to SEBI rules, you must deposit the fund before the cut off time.
What is to be done?
It is advisable to have an idea of the cut off timings of mutual funds. But you need not worry if you miss the deadline for the day. You need to be extra attentive in case of liquid funds or if your amount is too large. But generally, mutual funds normally have are meant for long term investment. So it does not matter if you miss a day’s NAV.