What Are the New Mutual Fund Cut-off Timings Revised By SEBI?

Planning to invest in mutual funds in 2025? Then, knowing the right timing is essential to make a real difference to the NAV you receive. SEBI has once again revised the mutual fund cut-off timings effective June 01, 2025, to simplify transactions, improve transparency and ensure a smoother investment experience.

In this blog, we will break down the latest deadlines, explain how cut-off timings affect your investments and provide other necessary information.

Quick Synopsis 

• The mutual fund cut-off time specifies the NAV applicable to your transaction on a given day.
• For most schemes, the cut-off is 3 PM; for liquid and overnight funds, it’s 1:30 PM for purchases and 3 PM for redemptions.
• Payment via net banking (from Axis, ICICI, HDFC, Kotak Mahindra and SBI banks) or UPI transaction (if completed successfully before the cut-off) allows same-day NAV. 

What are Mutual Fund Cut-off Timings?

The mutual fund cut-off timings are the deadlines determined by the mutual fund houses regarding receiving investors’ purchase or redemption requests. In India, it follows Indian Standard Time (IST) and differs depending on the category of fund schemes and payment procedures. 

To cope with market fluctuations that cause changes in Net Asset Value (NAV), the Securities and Exchange Board of India (SEBI) introduced this system.

Revised Cut-off Timings for Various Mutual Fund Schemes

SEBI implemented a new regulation on the applicable NAV, largely impacting the cut-off times. Here is the table that highlights the revised cut-off timings!

How Does Mutual Fund Cut-off Timings Impact Your Investments?

Understanding the revised cut-off timings of mutual fund investment is crucial for planning your investments in a better way. Here’s how it affects your investment: 

• Impact on Liquid Funds

Suppose you want to buy some units of a liquid fund. You have to place your order before 1:30 PM to have your transaction processed at the same-day NAV. When it comes to time-sensitive investments, this becomes especially important.

• Impact on Equity and Debt Funds

If you prefer to invest in such funds, make sure you place your request and receive your payment receipt before 3:00 PM. It will help you receive the same-day NAV applicable. If you send an order after 3:00 PM, you will be subject to the NAV of the next business day (T+1).

• Investment Through Net Banking

There are some select banks, called nodal banks (ICICI, HDFC, Axis, SBI, Kotak), for making payments through net banking that can help you receive same-day NAV. If you use another bank for some reason, you will receive the T+1 business day's NAV. 

What is Redemption Processing Time? 

The time a fund house takes to process a redemption order is called redemption processing time, which varies significantly based on several factors. They are:

• Types of mutual funds
• Redemption amount
• Definite procedures of the fund house

Usually, you can expect 1 to 2 business days for liquid funds and 2 to 4 business days for equity, debt and hybrid mutual funds to execute a redemption request.

However, this duration can be changed due to weekends and bank holidays.

What are Switch and STP Orders? 

Both types of transactions, Switch and STP, involve first redeeming units from an existing investment and then investing in a new one.

• The mutual fund cut-off timings for switch-out orders are 3:00 PM.
• When considering switch-in orders, they only get executed after the switch-out orders are settled. So it is clear that the NAV of your order is determined post-switch-out settlement.

Your orders (Switch/STP) are verified with OTP. It is a mandatory step since the OTP verification time plays a crucial role in NAV determination. 

What is the Relationship Between Cut-off Time and NAV? 

The NAV of a mutual fund depends on when the funds are received. This method is used for these transactions:

• Inter-scheme Transactions

The NAV calculation, depending on mutual fund realisation, applies to all inter-scheme transactions executed via STP, irrespective of the amount involved.

• Purchase Transactions

This rule is effective for all types of purchase transactions, such as initial, additional and lump sum investments and investments made through SIP, whatever the amount invested.

What are the Key Benefits of the New MF Cut-off Time? 

One of the primary advantages of the revised investment and purchase deadlines by SEBI is the increased level of convenience, as it provides you ample time for making investment decisions. Others are:

• Standardised Deadlines

With standardised deadlines now in place for all fund schemes, you can more easily keep track of cut-off times and plan your investments.

• Efficient Fund Management

The new rule regarding the cut-off time for mutual funds allows AMCs to manage the whole process with improved efficiency. As they get enough time to process requests and allocate assets, mistakes and errors are most likely to be reduced. 

• Same-Day NAV

This new deadline ensures that you gain the advantage of same-day NAV for their investments. It can make a huge difference in your returns, especially if you invest in liquid funds.

How to Get the Same Day’s NAV in Mutual Funds? 

These are some possible ways through which you can receive the same day’s NAV in mutual funds:

• Invest Through AMC’s Website or App

AMC often has partnerships with the majority of popular banks. Invest through this and you can receive a receipt instantly, which can increase the chances of receiving the same day's NAV.

• Consider Third-Party Platforms

Investing through BSE or NSE gives you an earlier cut-off time, allowing your request to be processed immediately, just like when you invest directly through the AMC's website.

Final Word 

Understanding the mutual fund cut-off timings is essential whether you are a new investor or a seasoned one. Being aware of the deadline will help you receive the desired NAV, which can significantly affect your returns.