There are a few type of mutual funds that impose a ‘lock-in period’ on your investment. These include equity-linked savings schemes (ELSS), Fixed Maturity Plans (FMP) in debt funds and closed ended mutual funds. A lock-in period refers to the minimum duration for which investors must hold their investment. Investors cannot redeem or sell mutual fund units in that period.
Lock-in periods can vary depending on the type of mutual fund scheme. For instance, Equity Linked Savings Schemes (ELSS) are a tax-saver mutual fund with a lock-in period of three years. That means you cannot sell or redeem their units before the completion of three years from the date of investment. Similarly, certain closed-ended mutual funds may have a lock-in period specified in the scheme’s offer document. Besides, returns generated
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