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Mutual fund buying rules changed. What NAV will be applicable?
- At present an investment upto ₹2 lakh in an equity or debt mutual fund gets the NAV of the same day if the application is submitted before 1 p.m.
- For higher sum, the NAV is applicable subject to realisation of funds
- There is no change in the rules for liquid and overnight funds
On Thursday, Sebi issued a mutual fund circular to change the NAV rules. From January 1, investors will get the purchase NAV of the day when investor's money reach AMC. "It has been decided that in respect of purchase of units of mutual fund schemes (except liquid and overnight schemes), closing NAV of the day shall be applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application," said the Sebi circular.
The new NAV rules will not be applicable to liquid and overnight funds.
Here's the NAV that you will get on your funds:
Equity Funds
- Investments upto ₹2 lakh: At present an investment upto ₹2 lakh gets the NAV of the same day if the application is submitted before 1 p.m., irrespective of realisation of funds. However, if the investment application is made after the cut-off time, the investor will get the next day's NAV.
- Investments over ₹2 lakh: Investors get the NAV of the day when the funds reaches the AMC. Suppose you submit an application to invest ₹3 lakh in an equity fund before 1 p.m., on Monday. If the investment amount reaches the mutual fund house on the next day, you will get the NAV of Tuesday as the purchase NAV and not Monday.
- New rule: From January 1, all investments will fetch the NAV of the day when the funds reaches the AMC, irrespective of the size of investment.
Debt funds
- Investment upto ₹2 lakh in debt funds other than liquid and overnight schemes: At present, if an application is submitted before 1 p.m., the investor will get the NAV of the same day, irrespective of realisation of funds.
- Investment over ₹2 lakh in debt funds other than liquid and overnight schemes: Any application over ₹2 lakh submitted before the cut off time of 1 p.m., will get the NAV of the day when the funds reach the AMC.
- New Rule for debt funds other than liquid and overnight schemes: Investors will get the NAV, subject to realisation of funds. So, an investor will get the NAV of the day when the funds reach the mutual fund house irrespective of the size of the investment.
- Liquid funds and Overnight funds: At present, the cut-off time for these category of debt schemes is 12:30 p.m. and the investor will get the NAV of the day when the funds are realised or, we can say when the funds reach the AMC.
- New rule: There is no change in the rules for liquid and overnight funds . The same rules apply to the liquid and overnight funds.
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First Published:18 Sep 2020, 12:11 PM IST
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