Time Required for Equity Mutual Fund Redemption Amount to Credit in Bank

Have you placed a redemption request for your equity mutual fund and are waiting for the amount to credit in your bank account?

TLDR; The amount will credit to your bank or demat account after seven days.

No matter what the terms, SMS or dates read, the amount will not be available for you before seven days or five working days.

Let me share my complete to help you understand where it takes so long for the redemption money to become available.

Mutual Fund Redemption

On April 10th and April 16th, I placed two redemption orders for my Tax Saver fund.

I placed the order before the cutoff time for the day. This is very important and so let first explain what the Cutoff time for mutual fund orders is.

Cutoff Timing

Every mutual fund has a cutoff time for accepting orders and processing them on the same day. For my fund, it was 1:30 PM.

So if I place the order before 1:30 PM, the redemption is as per the NAV at the end of the same day.

If the order is placed on Monday before 1:30 PM, I get the NAV of Monday end of the day. If I place the order after 1:30 PM on Monday, I get Tuesday’s end of day NAV.

The Weekend Redemption

10th of April was Saturday, and so the processing of my redemption request was done on Monday, 12th April. The order is considered to be placed before the Cut off time.

So I get the email from the fund house on 13th April at 3:53 AM, which is still the night of 12th April.

In the email, we have the amount that I will get and the date when it will get credited.

However, one crucial point to note is, 19th is when the amount gets credited but not in your bank account but to your demat account. Then you have to withdraw it from your demat account to your bank account.

I did try redeeming from ShareKhan and Zerodha, and both don’t provide the option for credit to the bank account. The amount is credited into your demat account only.

Effectively the amount becomes available to me on 21st April.

However, if you work like a machine and place the withdrawal request as soon as the amount is credited, you may get the credit one day in advance.

TLDR: the redemption on 10th April, and the fund is available to me on 21st April.

The Weekdays Redemption

The second redemption that I did was on 16th April 2021. It was Friday, and as usual, I placed the request before the cut off timing.

So I get the email from the fund house on 17th April at 2:51 AM, which is still the night of 16th April.

In the email, we have the amount that I will get and the date when it will get credited.

Again, the amount is credited to the demat account on the 22nd of April. I place a withdrawal request on 23rd, and the amount hits my bank account on the 24th of April.

Final Thoughts

The redemption of equity mutual fund on 16th April, and the money becomes available in the bank account on 24th April.

However, I could have withdrawn the amount on the 22nd after market trading hours, and I may have got it on 23rd April. Still, it can take 7 to 8 days or five to six working days.

However, if you redeem directly from the fund house website, one may get the money a day or two in advance.