How to Redeem Mutual Fund Online | How to Redeem Mutual Fund

Mutual Fund Redemption

Redemption of Mutual Funds Units is the sale of units in a mutual fund scheme. In a simple words, when you submit a request for redemption, you want to liquidate your investment in the mutual fund scheme. Investors invest in a mutual fund for achieving some financial goal and once that goal is achieved then they go for redemption.

The financial goals may be short-term or long-term and so as their investments. For example, a person had invested for the purpose of his daughter's marriage in a mutual fund which was a long-term goal. He wanted a sum of Rs. 5 lakhs and invested through SIP. When the value of mutual fund units reached Rs 5 lakhs, he opted for redemption.

There are two kinds of redemptions, you can either redeem fully or partly from your mutual fund folio:

  1. Full Redemption: When all the units help in your folio are redeemed. In this type, you will receive the principle as well as the accumulated interest thereon. After redemption, the unit balance in your folio will become nil. For full redemption, you will need to mention redeem "all units" or you need to mention "number of total units available in your folio".
  2. Partial Redemption: In this case, you redeem only a fixed sum of money or a fixed number of units from your folio. For example, you submit a redemption of Rs 1 lakh from your folio whose current value is Rs. 2.5 lakhs. The redemption will be processed on the NAV of that date on which you submit your redemption. After processing, respective units against Rs 1 lakh will be deducted from the total units of your folio and then the balance units in your folio will remain.

Mutual Fund Redemption Process

There can be two ways to redeem mutual funds units:

Redemption through the Mutual Fund Offices or Point of Acceptance (Offline)

You need to perform following steps:

  • Step 1 : You need to send a duly signed redemption request to the Mutual Fund or the Point of Acceptance like the registrar's office.
  • Step 2 : The proceeds from the redemption will directly be credited to the registered bank account in a couple of days.

Online Redemption

You need to perform following steps:

  • Step 1 : Go to the online portal/ website of the mutual fund.
  • Step 2 : Log in to your registered account and select redemption option.
  • Step 3 : Select the fund and the number of units / amount you want to redeem.
  • Step 4 : Confirm your transaction.
  • Step 5 : The proceeds from the redemption will directly be credited to the registered bank account in a couple of days.

How to Switch Mutual Funds

Switching means shifting of funds from one MF scheme to another MF scheme. You are allowed to switch your units any time for those schemes which do not have any lock-in period. For those schemes where there is a lock-in period, you cannot switch.

Scheme from where you are switching your funds or units is called "Switch-out" scheme and the scheme in which you are shifting your funds or units is called "Switch-in" scheme. You can do full switch or part switch of your funds. For switching, you need to fill in one transaction slip in which you are required to mention switch details.

Switch Mutual Fund Scheme | Switch From One Mutual Fund to Another

There can be two ways to switch mutual funds units

1. Switch through the Mutual Fund Offices or Point of Acceptance (Offline). You need to perform following steps:

  • Step 1 : You need to send a duly signed switch request the Mutual Fund or the Point of Acceptance like the registrar's office.
  • Step 2 : Mentioning of names and plans of both the schemes is to be carefully done.
  • Step 3 : Your switch request will be processed and then you will receive the statement of account on your email or in physical format in a couple of days usually 2 to 4 working days.

2. Online switch

You need to perform following steps:

  • Step 1 : Go to the online portal/ website of the mutual fund.
  • Step 2 : Log in to your registered account and select switch option.
  • Step 3 : Select the scheme, plan and the number of units / amount you want to switch from and then select name and plan of the scheme in which you want to switch the units / amount.
  • Step 4 : Confirm your transaction.
  • Step 5 : Your switch request will be processed and then you will receive the statement of account on your email or in physical format in a couple of days usually 2 to 4 working days.