If you are invested in an openend mutual fund (MF) scheme and want money back, you need to redeem your MF units to get money back.
This can be done on any business day.
1. What does an investor need to do to redeem his MF units?
In case a unit holder wishes to redeem from any of the openended schemes of a MF, he can do so on any business day. Redemption can be done by filling up a transaction slip, which can be downloaded from a website of the fund house. Investors can also detach the transaction slip from the end of the account statement. This slip needs to be duly filled in and submitted at any point of acceptance of the fund house or its registrar. Alternately, some fund houses also allow investors to redeem through their website or through mobile applications.
2. What value will an investor get when he redeems his units?
Investors can calculate the approximate value of their investments by multiplying the number of units they hold with that day’s NAV (net asset value) of the particular scheme. For example: suppose you want to know the value of your investment of 1,000 units in xyz equity fund — growth on September 30,2016. If the NAV of that scheme for that day is Rs100 then the value of your investments is Rs100 multiplied by 1,000 i.e. Rs 1 lakh.
3. What redemption money will come to an investor’s account?
The final money that comes in your account will depend on the exit load, applicable NAV and securities transaction tax (STT), if applicable. Most equity funds have an exit load of 1% if you redeem before one year, though some funds have even higher loads and some have a zero exit load. The NAV for the day depends on the day and time when you submit your redemption request.STT is applicable for all equityoriented schemes.
4. How will I receive my redemption proceeds?
Redemption proceeds are directly credited by the fund house to the investor’s bank account if they have complete core banking account number of the investor, IFSC code and the particular bank and branch has been enabled for RTGS/NEFT. In cases other than RTGS/NEFT, where the fund house does not have complete bank details, a cheque for the redemption amount is sent to the investors address.
5. What does an investor do, if the fund house rejects redemption request on signature mismatch?
Over the years, several times investor’s signature could change and there could be a mismatch. In the fund house rejects such a request, due to signature mismatch, investors would need to submit a fresh redemption request, along with the banker’s attestation. This attestation needs to be complete in all respects (i.e. specifying the bank account number, bankers name, designation and employee ID). This is required to ascertain the veracity of the investor.