Mutual Fund Cut-Off Time: All You Need to Know

What is the Mutual Fund Cut-Off Time?

When you make a mutual fund transaction, whether you are investing (buying units) or redeeming (withdrawing), you are doing so at a price called the Net Asset Value (NAV). The NAV is determined at the end of each business day (after market hours) based on the market value of the underlying securities held in the fund. Here is the formula for determining the NAV of a fund:

NAV = (Total Assets - Total Liabilities)/Total Number of Outstanding Units.

It represents the market value of the total securities owned by the mutual fund scheme. NAV is essentially the price you pay for the mutual fund scheme's units.

However, not all clients who transact on the same day receive that same day's NAV. This is where the cut-off timing comes in.

The cut-off time is the time stamp by which your transaction request must be submitted and time-stamped to qualify for the same day's NAV. If it is received after that cut-off time, it will receive the next business day's NAV.

[Read: June 4th Glitch: Don't Miss the Next Dip! Know Your Mutual Fund Cut-Off Times]

Cut-Off Timings Across Mutual Fund Types (As of March 2025)

Different mutual fund categories have different cut-off times. Here's the current schedule followed by fund houses:

Note: All timings refer to Indian Standard Time (IST) on business days.

Why Cut-Off Time Matters to You As an Investor

For a long-term investor, it probably wouldn't much matter if your transaction received today's or tomorrow's NAV. But in volatile markets, it can make a huge difference.

1. Price Sensitivity

In turbulent markets, the price of a mutual fund can be quite volatile from day to day in terms of NAV. If a market execution is volatile, to the downside, and you missed the cut-off time for a redemption or purchase a day, you may be at a much lower NAV the following, changes to the retract may be quite substantial.

2. Planning & Execution

Cut-off timings become very important if you plan to try to time a dip in the market for a lump-sum investment or pull out before the anticipated market fall. A missed deadline can cause an opportunity loss.

3. Cash Flow Needs

If you are redeeming to meet short-term expenses, getting the redemption processed a day later could mean a delay in receiving the funds by another business day.

[Read: Mutual Funds Sahi Hai, But Only If You Invest Wisely]

Why Cut-Off Time is Now More Relevant Than Ever

In 2024-25, the Indian equity market has been on a rollercoaster. Following the July 2024 budget of the Modi 3.0 government, markets witnessed increased volatility. Global geopolitical tensions, persistent inflation, and tightening monetary conditions have added to this uncertainty in the market.

In such an environment:

• NAVs for equity and hybrid funds are swinging daily

• Liquid and overnight funds have become popular parking spots for short-term capital

• Redemptions are frequent, especially with investors booking profits or rebalancing

This backdrop makes it critical for investors to be cut-off time aware, particularly for short-term and tactical transactions.

How Transactions Work in Practice

To fully grasp how cut-off timing impacts you, let's walk through two examples:

Scenario 1: Equity Fund Purchase

You initiate a Rs 1 lakh lump sum investment into an equity mutual fund on Monday at 2:30 PM. You have already transferred the money and the fund house receives your application before the 3:00 PM cut-off.

In this case, you will get Monday's NAV.

However, if the fund house gets your application at 3:01 PM, you will get Tuesday's NAV which may be higher or lower depending on the market.

Scenario 2: Redemption from Liquid Fund

You redeem Rs 5 lakh from a liquid fund on Thursday at 2:00 PM.

Because you submitted before the 3:00 PM cut-off, you will get Thursday's NAV, and the money will usually be credited within T+1 day (Friday).

But miss that by a few minutes, and it shifts to Friday's NAV with funds reaching you on Monday (T+1 from Friday).

Recent Regulatory Changes & SEBI's Move

SEBI has been proactive in modernizing the mutual fund ecosystem, particularly around transaction processing and investor transparency.

• Latest Proposal: Extended Cut-Off for Overnight Funds

  In early 2025, SEBI floated a proposal to extend the redemption cut-off timing for overnight mutual funds from 3:00 PM to 7:00 PM. This was especially targeted to help stock brokers and clearing members who need to un-pledge mutual fund units after the markets close.

  This proposal reflects a growing need for flexibility in fund operations, especially given the 24x7 digital landscape.

• Earlier: NAV Applicability Linked to Fund Realization (2020 onwards)

  Post-2020, SEBI mandated that NAV allotment would be based not just on the time of transaction, but also realization of funds. This means:

  Merely placing a transaction before 3:00 PM is not enough. The fund house must also receive the money (credited to their account) before the cut-off. This has led to delays when using third-party UPI, NEFT, or RTGS-especially for last-minute transactions.

Investor Tips to Beat the Clock

Here's how you can stay ahead and make sure you don't miss out on the right NAV:

• Use Net banking Linked to AMC Platforms

  Most AMCs provide direct investment portals where payments through net banking ensure real-time credit and faster processing.

• Avoid Last-Minute Transactions

  Plan your purchases and redemptions well before the cut-off time, ideally by mid-morning on a business day.

• Understand T+ Timelines

  Even if you meet the cut-off, redemption proceeds take T+1 or T+2 days depending on fund type. Don't wait till the last moment if you need the money urgently.

• Use STP/SWP Smartly

  Systematic plans like STPs (Systematic Transfer Plan) and SWPs (Systematic Withdrawal Plan) can be set to automatically process transactions well ahead of deadlines.

Cut-Off Timing & SIPs: Do They Matter?

For SIPs (Systematic Investment Plans), cut-off timing is not applicable, since the investment is pre-scheduled. Your SIP order is automatically executed based on the fund mandate and payment realization.

However, delays in your bank ECS/ACH payments or changes in the SIP date can affect which NAV gets applied.

To Summarise...

In a mutual fund investment journey, every detail counts. And cut-off time though it may appear procedural is actually a critical factor in determining when and how your money works for you.

In a fast-paced and volatile market like the one we are navigating in 2025; understanding and respecting cut-off times becomes even more important. Whether you are booking profits, rebalancing your portfolio, or moving to safety, your awareness of these timing rules can make a real difference.

So next time you transact, don't just focus on the fund you should also mind the clock.

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Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.