How to Redeem Mutual Fund Units?

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  • 22 Dec 2023
How to Redeem Mutual Fund Units?

There are various ways through which you can redeem mutual fund units. Some of the common ways to do so are as follows:-

  1. Directly from the AMC

Accessing your account and redeeming units is a breeze if you’ve invested in mutual fund units through an AMC. Log in to the AMC’s dedicated portal. This online platform is designed to be user-friendly, allowing investors to navigate easily.

Once logged in, you’ll find an option to sell your mutual fund units. This process is straightforward and allows you to choose whether you want to redeem a portion of your units or the entire investment. It’s all about what suits your financial goals and preferences.

Many AMCs offer mobile applications designed to be accessible and easy to use. If you prefer managing your investments on the go, you can use the AMC’s mobile app to perform the same transactions you would on the web portal.

  1. Redemption through Demat Account

If you bought your mutual fund units using your Demat account, redeeming them is a breeze. Follow these easy steps:

  • Log into Your Securities Account

Access your demat account online or your bank or financial institution’s mobile app. This is where the magic happens! Log in with your details, and you’re ready to roll.

  • Initiate the Redemption Process Look for the option to redeem your mutual fund units. It’s usually straightforward, often found in the navigation menu. Click on it, and you’ll be on your way to completing the redemption application.

  • Complete the Redemption Application

Fill out the necessary details in the redemption form. This may include the number of units you want to redeem and your preferred mode of payment. Take your time to ensure accuracy – we want everything to go smoothly!

To redeem through an agent or distributor:-

  • Download the Redemption Form

Begin by downloading the redemption form from the official CAMS website. Look for the form related to the mutual fund you wish to redeem.

  • Fill in the Form

Once you have the form, fill it out carefully and accurately. Provide details such as your name, folio number, the number of units you want to redeem, and any other required information. Make sure to sign the form as well.

  • Visit the Nearest CAMS Office

Take the filled and signed redemption form to the nearest CAMS office. CAMS has multiple service centers across the country. You can find the address of the nearest office on their website or by contacting their customer service.

  • Submit the Form

When you reach the CAMS office, submit the redemption form along with any required supporting documents. These could include a copy of your PAN card, KYC details, or any other documents specified by the mutual fund company.

  • Wait for Processing

After you submit the form, the redemption request will be processed. The time it takes to complete this process may vary, so it’s important to be patient. You can inquire about the expected processing time at the CAMS office or through their customer service.

  • Confirmation and Fund Transfer

Once the redemption is processed, you will receive a confirmation statement. This statement will detail the transaction and confirm the redemption of your mutual fund units. The redemption amount will then be transferred to your registered bank account.

  • Verify the Details

Upon receiving the confirmation, carefully review the details to ensure accuracy. Check that the redeemed amount matches your expectations and that all the information is correct.

Redeeming mutual fund units involves selling your investment in a mutual fund. The decision to redeem mutual fund units depends on various factors, and it’s important to consider your financial goals, investment horizon, and market conditions. Here are some situations when you might consider redeeming mutual fund units:

  • Financial Goals Achieved: If you invested in a mutual fund to achieve a certain financial goal (such as buying a house, funding education, or saving for retirement) and you have reached that goal, it may be a good time to redeem your units.

  • Change in Financial Situation: If your financial situation significantly changes, such as a job loss, major expenses, or an unexpected windfall, you may need to reassess your investment strategy and consider redeeming or adjusting your mutual fund holdings accordingly.

  • Market Conditions: If you believe that the market conditions are unfavorable and are likely to result in a decline in the value of your mutual fund holdings, you may choose to redeem your units to protect your capital.

  • Fund Underperformance: If a mutual fund consistently underperforms its benchmark or similar funds over an extended period, you might consider redeeming your units and reallocating your investments to better-performing options.

  • Changes in Investment Objectives: If your investment objectives or risk tolerance change over time, you may need to redeem mutual fund units that no longer align with your financial goals.

In Conclusion

Before redeeming mutual fund units, it’s crucial to consult with a financial advisor to make sure that your decision aligns with your overall financial plan and goals. Additionally, consider the specific terms and conditions regarding redemption policies and fees outlined in the mutual fund’s prospectus.

FAQs on How to Redeem Mutual Fund Units

When you redeem a mutual fund, the amount equivalent to redeemed units gets credited into your bank account.

From 1 February 2023 onwards, AMCs have implemented a T+2 redemption payment cycle for equity mutual fund schemes. This adjustment aligns with the T 1 settlement cycle of equity markets and aims to enhance the advantages for mutual fund investors.

If you redeem before 3 pm, the applicable NAV will be for the same business day. If redemption occurs after 3 pm, the NAV of the next business day applies.

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