In the world of investment, flexibility is key, and there come moments when an investor needs to transform their mutual fund holdings into cash. The investor may choose to sell their Mutual Fund holdings, due to personal financial urgencies or the investor achieving the goal they had been investing for, tax credit, retirement etc...
Methods to Redeem Mutual Funds
Mutual fund can be redeemed through online or offline channels, depending upon the AMC(s) and Investor’s preference, each requiring specific steps:
Offline Redemption: AMC/RTA/Agents/Distributors
In order to redeem your mutual fund units offline, you can submit a signed redemption request form to the AMC's or Registrar's designated office. An investor can choose to redeem their mutual funds through an agent or distributor by submitting a duly signed redemption form, which is then submitted to the AMC or RTA office. You will be required to fill in essential details, including the holder's name, folio number, and the number of units or the amount required for redemption, and then sign the redemption form. After the successful completion of the process, your proceeds will then get credited to your registered bank account or through an account payee cheque if the IFSC code is not provided
Online Redemption: Websites of- AMC/RTA/Agents/Distributors/MFCentral and /Trading/DEMAT Account
In order to redeem your mutual fund units online, you can visit the desired mutual fund / Registrar / MFD/Aggregator website or MF Central website. Log in using the folio number or PAN card number or the specific login credentials for that website. Select the scheme and specify the number of units or the redemption amount.
Redemption through Demat: If you initially purchased the mutual funds through your Demat or trading account, the redemption process should be carried out using the same account. Following completion, an electronic payout, in response to the redemption request will be executed, with the credited amount directed to the bank account associated with your Demat account.
Lastly, investors must be aware of potential charges like exit loads when redeeming mutual fund holdings before a specified period. Exit loads vary by fund category and duration. Some schemes like ELSS have a specified lock-in period before which they cannot be redeemed. Additionally, capital gains taxes, influenced by investment amount and holding duration, can significantly impact returns. To make informed decisions, investors should assess exit loads and tax implications before redeeming their mutual fund units.
Disclaimer
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
