How To Withdraw Money From Your Mutual Fund Scheme?

Mutual funds are professionally managed investment vehicles that pool money from various investors to invest in a diversified portfolio of securities such as stocks, bonds, and money market instruments.

The Securities and Exchange Board of India (SEBI) regulates mutual funds in India to ensure investor protection and transparency.

There are various types of mutual funds in India such as equity funds, debt funds, hybrid funds, index funds, and sector funds, among others. Each type of mutual fund invests in a specific type of asset class and has its own risk-return profile.

Investors can invest in mutual funds in India through various channels such as mutual fund companies, online platforms, and stockbrokers. To invest in mutual funds, investors need to complete the Know Your Customer (KYC) process, which includes submitting identity and address proofs.

Mutual funds offer several benefits such as diversification, professional management, liquidity, and convenience. However, they also carry market risk, and investors must carefully assess their risk appetite and investment objectives before investing in mutual funds.

How To Withdraw Your Money (Redeem Your Units) In A Mutual Fund?

Mutual Funds, being regulated by SEBI, have laid out norms to ensure liquidity. Open end schemes, which comprise a large majority of schemes, offer liquidity as a major feature. Liquidity is ease of access or conversion of an asset into cash.

Once the redemption is complete, funds are transferred to the designated bank account of the investor, within 3-7 business days after the redemption was lodged.

Redeem Mutual Funds: Online

Mutual funds can also be purchased and redeemed online on a mutual fund’s website.

As per the information available on the official website of Association of Mutual Funds in India (AMFI), you have to log-on to the ‘Online Transaction’ page of the desired Mutual Fund and log-in using your Folio Number and/or the PAN, select the Scheme and the number of units (or the amount) you wish to redeem and confirm your transaction.

In addition, central service providers like CAMS (Computer Age Management Services Pvt. Ltd.), Karvy, etc. offer the option of redeeming mutual funds bought from several AMCs. You can download the form online or visit the nearest office. Please note that these agencies might not service all the AMCs.

Redeem Mutual Funds: Offline

AMFI says in order to redeem funds through offline mode, the unit holder needs to submit a duly signed Redemption Request form to the AMC’s or the Registrar’s designated office.

In the redemption form one needs to fill in details like the unit holder’s name, folio number, scheme name including the plan details, and number of units to be redeemed (or the redemption amount desired). In addition, all the holders have to sign the Redemption form. The proceeds from the redemption will be credited to the registered bank account of the first named unit holder.

Things To Keep In Mind

Two issues need to be kept in mind. One, there may be an exit load period in certain schemes. In such cases, redemptions before a certain specified period, say 3 months, may attract a nominal load like 0.5% of asset value. Fund Managers impose such loads to deter short term investors.

Secondly, AMCs (mutual fund company) may indicate what the minimum amount for redemption is. Investors are advised to read all scheme related documents carefully before investing.

In case of any queries or difficulties with the redemption process, you can contact the customer support of the mutual fund company for assistance.

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