Cut-Off Timings in Mutual Funds – What are they?

investmentWhat do you understand by cut-off time in mutual funds? If you are relating it with something that restricts your purchase and selling of mutual fund; you are wrong.

In fact, cut-off time determines the Net Asset Value (NAV) of your units for sale and purchase; where allotment of NAV is based on the time when an investor applies and starts investing with the fund house.

Equity, Debt and Liquid mutual funds have different cut off times. It solely depends on the investor as to when he/she puts application and funds. Based on the time of submission, he/she could receive NAV either on the same day or next day.

So, should you worry about Cut-Off Timing?

Cut-off timing doesn’t make difference to investments made in long-term funds. However, it can matter to individuals planning to investment lump sum amount.

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