how to redeem sip mutual fund online
how to redeem sip mutual fund online
There are many investment options available to investors in India, mutual fund schemes have their own long list.
Types of Mutual Funds can be mainly divided into Debt, Equity, Hybrid, Index Funds.
Whenever you invest in these funds, it has to have a specific objective and risk appetite along with long-term short-term tenure. Mutual funds are convenient, well managed, and have high return potential when compared with other investment options.
Liquidity, as well as easy entry, and exit options, are provided depending on the type of fund chosen. You can also redeem these funds in case of an emergency.
In this article, we will decide when you should redeem your funds, and how.
What is Mutual Fund Redemption?
Mutual fund redemption is the process where the investor wants to sell the investment units made in a particular fund.
Sometimes the idea of an investor locking the funds over time due to personal reasons or anticipating the fund’s performance may be wrong. The investor can also change the fund to change his investment.
Just as starting a mutual fund is easy, redeeming a mutual fund is even easier.
Key Methods to Redeem Mutual Funds
Following are the main ways to redeem your mutual fund investments:
If your purchase is done directly through Mutual Fund House (Asset Management Company), you will have an ID and Password to log in to the portal. After logging in to the portal, the investor can buy units online, and you can easily redeem any existing fund units.
- You can redeem all the units in your plan (if they are not locked-in) or redeem some of them. If you redeem your account is closed, but if you redeem only a few units, then the remaining units will remain and work accordingly.
- You can also visit the AMC and submit a form to redeem your funds. After the request is processed, the amount of redemption N.E.F.T is transferred to the investor or through a check sent to the addressee.
- Online mode is a modern and fast-medium. But the application may be rejected due to wrong data or signature mismatch. It may delay the completion of the redemption process,
If your investment is made through an agent, you can also do redemption through an agent.
In this process, the mutual fund redemption form will have to be filled out, as well as the number of units will be given, The agent then submits the form to the office. Once the redemption process is initiated amount N.E.F.T. Transfer is done by a check the customer’s address.
Through online portal
Any A.M.C. Apart from buying mutual funds directly from the agent or agent, you can buy mutual funds through online portals. These partner portals also provide you with the facility of redemption requests.
This process is quite simple. For this, everyone has to have a login ID. And have to create a password. You can redeem your mutual funds in the same way as you bought the units.
After you confirm, the request is processed, and the amount is directly transferred to the linked bank account.
Through Trading or Demat Account
If the mutual fund is purchased from its own Demat or trading account, then redemption is done through this account.
As soon as the trading process is completed online, the e-payment is done in the same registered bank account in the Demat account.
Computer Age Management Services allows investors to access several A.M.C. Offers an option to redeem mutual funds of Rs. Here the redemption form can be downloaded, and after filling and signing it can be submitted to any CAMs office.
Other agencies like Karvy Computer Share also provide these services. Investors can redeem their funds by choosing these agencies.
Their information is verified after the redemption request. And the payment is transferred to the registered bank account of the investor within 2-4 days. In the case of a cheque, the process may take a few more days to complete.
Reasons for redeeming mutual fund units
One can redeem their mutual funds at will if their lock-in period expires, but there are a few things to keep in mind before making a redemption request.
- It helps the investor to redeem pre-mature funds which affect the payment amount. Investors should redeem their investments only for the following reasons:
- The investment target is met. Like if someone started investing to buy a car in 5 years. As time passes, our needs, goals, and objectives change. In case there is a need for funds in an emergency, this requirement is met through the sale of units.
- If changes are taking place in the scheme which is no longer suitable for the investor or it may not serve the purpose of the investor.
- Because the fund manager has a style of investing, the way of investing also changes. The performance of the fund and then it is advisable to make a decision.
- If the scheme is underperforming but the benchmark and peer funds are outperforming. It means investment is in loss or getting only minimum return/ profit. But temporary poor performance does not mean that it will perform poorly in the long run. But if a fund is consistently underperforming, it is better to sell the available units.
Investing in mutual funds is quite easy and simple, one must have a long-term plan while choosing these funds “redeem sip mutual fund online”. A long-term plan generates income, capital security, and capital growth. Though long-term planning requires a lot of patience, effort, one has to wait for good results “redeem sip mutual fund online”.
More people are turning to these funds nowadays as they give good returns. Because the fund is invested differently in it. So it reduces the risk and increases the chances of good returns/profits.
When a person chooses to invest in stocks directly, it is not always possible to create such stocks which can reduce all the risk appetite from different investments. On the other hand, can invest in shares of multiple companies, due to their large AUM.