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One of the biggest advantages of investing in a mutual fund is the liquidity it offers. It means that you can convert your mutual fund units into liquid cash anytime and from anywhere, whenever you want. Though some fund houses may charge you an exit load for exiting your investment within a year, you’re largely free to invest/redeem in mutual funds as per your will.Withdrawing money from a mutual fund involves a very simple and hassle-free process. You can do so by either submitting a redemption request form at a designated office of the Asset Management Company (AMC), or by simply visiting its online portal and requesting for a withdrawal.
Withdrawing the money invested in mutual funds
Mutual funds often provide the desired returns when you stay invested in them for a long period of time. However, at times you may need liquid cash to tackle a financial emergency or to buy an asset such as a car or house. Redeeming your mutual funds at such times can be a good idea as it provides you with substantial liquid cash which you can use to fulfil your requirements.Sometimes, your risk appetite may also change, leading you to exit from a certain type of mutual funds. Also, if Net Asset Value (NAV) of the mutual fund units that you’re holding has been stagnant since a long period of time, you can think about encashing them and reinvest the funds in some other scheme.Below are the methods through which you can withdraw the money invested in mutual funds:
- Directly through the AMC You can redeem your mutual fund units by submitting a duly filled redemption request form at a registered office of the AMC whose mutual funds you’ve purchased. You can also visit the online portal of the AMC and submit a redemption request after logging in with your Folio number and/or PAN.
- Through a DEMAT or trading account In case you’ve purchased the mutual fund units through a DEMAT or trading account, you will have to redeem them through the same account only. Once you’ve placed your redemption request, the pay-out amount will be credited directly to your bank account linked with the DEMAT account .
- Via agents, distributors, or central service providers You can also redeem your mutual funds with the help of agents, distributors, registrars, or central service providers. All you need to do is contact your mutual fund agent or any of the central service providers and submit an online redemption request with the AMC through them.
After completing the process, the proceeds from the redemption of mutual funds will be credit directly into your bank account via NEFT within 2-3 working days. The Final Word Redeeming the mutual funds can be done as easily as clicking a button from the comfort of your home. However, no matter what the reason is, the decision to exit a mutual fund should be made carefully after considering various factors such as tax, lock-in period, exit load, and current economic conditions, among others.
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
