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Summary: The cut-off timings of your mutual fund order could make a difference to your returns or the number of units you get. By missing them, you might be locking in a less favourable NAV. Read on to find out how.
Imagine this. You’re ready to invest Rs 10,000 in a mutual fund. Today’s NAV (net asset value, i.e., the price per unit) is Rs 90. Tomorrow, the markets might jump, pushing the NAV to Rs 100. If you invest today, you’d get 111 units; delay it by a day and you’ll only get 100 units.
This is what makes the cut-off time important. It’s the daily deadline that decides which day’s price you buy or sell your mutual fund units at. And missing it could mean fewer units when you invest or a lower amount when you redeem.
How it works
To get the same day’s NAV as you placed your request:
- Your order must be placed before the cut-off time and
- Your money must reach the fund house before the cut-off
Miss either and you get the next day’s NAV instead. This rule holds for all mutual fund schemes except liquid and overnight funds, which have a slightly different variation. Check the detailed cut-offs in the table below:
Cut-off timings for mutual fund transactions
| Fund type | If you are buying (investing) | If you are selling (redeeming) |
|---|---|---|
| Liquid/ *Overnight funds | By 1:30 pm: Previous-day NAV (if money realised by then) After 1:30 pm: Same-day NAV (if money realised by 3 pm) |
By 3 pm: Same-day NAV After 3 pm: Next-day NAV |
| All other funds (equity, hybrid, debt etc.) | By 3 pm: Same-day NAV (if money realised by then) After 3 pm: Next-day NAV |
By 3 pm: Same-day NAV After 3 pm: Next-day NAV |
| *For overnight funds redeemed online, the cut-off time is extended to 7 pm to get the same-day NAV. | ||
Example scenarios
- If you sell a liquid fund at 4 pm on Friday, the cut-off time for redemption has passed. As a result, you will receive the NAV of the next business day (typically Monday, unless it's a holiday).
- For a purchase of equity funds on Friday, if your payment is realised before 3 pm, you'll get Friday's NAV. Otherwise, you'll get the NAV of the next business day.
How to avoid missing the cut-off:
- Don’t wait till the last hour. Always leave buffer time for your bank transfer.
- Use instant payment modes like UPI or net banking, as other slower methods may cause delays.
The cut-off time decides the price at which your money enters or exits the fund. Even a five‑minute delay can cost you a day’s worth of gains or make you buy at a higher price.
Want to start a Rs 5,000+ SIP in a mutual fund?
While cut-off timings may make a short-term difference, in the long run, what truly builds wealth is staying consistent—letting your SIPs ride through market ups and downs to let compounding do its magic. That’s where Value Research Fund Advisor can help.
Our analyst-curated fund recommendations and customised portfolios can help you stick to a long-term investing plan suited to your personal goals.
Also read: The hidden cost of adding 'just one more fund'
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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