Mutual funds are popular among investors because of the easy liquidity that they provide. You can withdraw or redeem your mutual fund investments whenever you want. The process is simple and money is credited into the account in the shortest possible time. However, many of you don’t know whether you can withdraw money from your mutual fund investments and how to do so. So here is a complete guide to withdrawing from your mutual fund accounts –
- You can withdraw from mutual funds either online or offline
- Withdrawals depend on the type of mutual fund you have invested in. There are open ended and close ended mutual funds. Under open-ended funds, units are bought and sold on a continuous basis. As such, withdrawals are easy and quick. In the case of close-ended funds, the number of units is fixed during the period in which the fund is offered. Withdrawing from such funds, till the scheme period is continuing, is not possible. However, most mutual funds are open-ended schemes which allow easy withdrawals.
- Withdrawals can be done anytime. There is no lock-in period for which you have to hold your investments. In the case of Equity Linked Savings Scheme (ELSS), however, there is a lock-in period of 3 years. No withdrawals are allowed during this period in ELSS schemes.
- There might be an exit load applicable in the scheme when you withdraw within a specified period. For instance, equity mutual funds charge an exit load of up to 1% if you withdraw within 12 months of investments. On the contrary, short-term liquid funds have no exit load. So, when withdrawing, check whether the exit load is applicable or not and if it is applicable find out the rate of load.
- There might also be a Securities Transaction Tax levied on your withdrawal if you are withdrawing from your equity mutual fund investments
- You can choose to withdraw either a particular number of units or a particular amount
- The Net Asset Value of the mutual fund scheme as on the date and time when the withdrawal request is made would be used to calculate the number of units withdrawn or the amount withdrawn.
Now you know the important aspects of withdrawing from your mutual fund schemes. Let’s discuss the process of withdrawing
Procedure to withdraw money from mutual funds ( Offline )
For withdrawing offline, you would have to do the following –
- Fill up and sign a Redemption Request Form which is available with the mutual fund house or mutual fund registrar (CAMS, Karvy, etc.) if you have invested through them. The form would contain details like your name, folio number, PAN Card number, amount to be redeemed, etc.
- Submit this form to the mutual fund house or to the office of a registrar. There are designated offices of mutual fund houses as well as registrars wherein the forms should be submitted.
- The form would be analyzed and the withdrawn amount would be credited to your bank account within a maximum of three working days.
Procedure to withdraw money from mutual funds ( Online )
When you choose the online mode, withdrawal of your fund is easy and quick. All you have to do is –
- Go the mutual fund house’s website and log into your account. Alternatively, you can visit the website of a mutual fund registrar (like CAMS, Karvy, etc.) if you have invested in their platforms.
- Enter your folio number and choose the scheme from which you want to withdraw
- There would be a withdraw/redeem fund option. Choose the option and enter the amount or the number of units which you want to withdraw.
- Confirm your transaction.
- Since you bought the scheme online, your bank account details would be available with the fund house. The withdrawn amount would then be transferred to your bank account at the earliest.
Online withdrawals are easier, more convenient and quicker than offline ones. So, try using the online medium of withdrawal for receiving the funds at the earliest.
Withdrawing from your mutual fund investments is easy and simple and can be done whenever you want (if there is no lock-in period like in case of ELSS schemes). So, if you want to withdraw, read the above-mentioned aspects and steps of withdrawal first and know the complete details of withdrawing mutual funds.