As per a circular dated September 17, 2020, that Securities and Exchange Board of India (SEBI) had said that mutual fund units will be allotted at the NAV applicable on the day of realization of funds.
Here, ‘realisation of funds’ means that the NAV applicable on your transaction will depend on if the fund house has received your money or not.
While this was to be implemented from January 1, 2021, in circular SEBI/HO/IMD/DF2/CIR/P/2020/253 dated December 31, 2020, Sebi had said that the implementation was being pushed by a month.
This will now be applicable from February 1, 2021.
Read more on Groww: Mutual Fund Buying Rules Changed – Same Day NAV Applicable
Liquid/Overnight Funds: You will get previous day’s NAV if the transaction is done before cut-off timing
All other funds: You will same day’s NAV if transaction is done before cut-off timing.
Relevant cut-off timings and NAV applicability is mentioned in the table below. Have a look at this illustration below for better clarity:
The applicable NAV for transactions under mutual fund schemes is determined as follows:
|Type of fund||Order placement on Groww (cut off)||Payment receipt on Fund House/AMC (cut off)||NAV applicability|
|Liquid / Overnight||12:00 noon||12:00 noon||Previous day|
|Liquid / Overnight||After 12.00 noon||After 12.00 noon||NAV of the day immediately preceding the next business day|
|All other funds||2:00 pm||2:00 pm||Same-day|
|All other funds||After 2.00 pm||After 2.00 pm||Next business day|
The cut-off time for placing redeem orders is 3pm. Placing your redeem order before the cut-off time means you’ll get:
Note that OTP verification is now mandatory for processing your redeem/SWP orders. If your order is not verified with an OTP, the order will not be processed further by the fund house. Your NAV would be dependent on when the OTP is verified.
Switch and STP orders are a combination of purchase & redeem orders. Groww’s cut-off time for switch-out orders is 3 PM, and switch-in orders are processed only after the switch-out leg is settled. So, NAV for switch-in orders is determined only after the switch-out order is processed.
Note that OTP verification is now mandatory for processing your switch/STP orders. If your order is not verified with an OTP, the order will not be processed further by the fund house. Your NAV would be dependent on when the OTP is verified.
It is the amount you can withdraw from Groww Balance to your bank account.
When will my balance be available to withdraw:
|Scheme Type||Groww Cut-off Time|
|Liquid and Overnight Funds||3:00 PM|
|Debt/Conservative Hybrid Fund other than Liquid and Overnight funds||3:00 PM|
|All other schemes other than those mentioned above||3:00 PM|
There are primarily two ways to pay for a SIP instalment: AutoPay and BSE Mandates. Here’s how the NAV and order completion dates will change after February 1, 2021:
For investors with SIP on AutoPay, there will be no change in the applicable NAV date and order completion of your SIP orders.
For investors with BSE mandates (Biller and One-time mandates), until now BSE was deducting the SIP instalment amount from your bank account directly on the SIP due date and the order completion was happening on T+1 day.
Due to the same-day NAV change implemented from February 1, 2021, the instalment amount will be deducted on T day by BSE and fund realization at BSE end is T+ 2/3 business days and the expected completion date for these orders will change from T+1 business days to T+ 4/5 business days from BSE end.
Hence, the order completion date and NAV date is pushed for all BSE mandates( Biller and One-time mandates).
|AutoPay||BSE Biller mandate||BSE One-time mandate|
|Previously||Expected NAV date||T||T||T|
|Expected order completion date||T+2||T+2||T+2|
|Now||Expected fund realization date||T (No change)||T+3||T|
|Expected NAV date||T (No change)||T+4/5||T|
|Expected order completion date||T+2 (No change)||T+5/6||T+2|
• T is the transaction/due date for your SIP instalment.
How to find out whether my mandate is a BSE mandate( Biller and One-time mandate) or Autopay?
Here are a few steps to know which mandate you have:
They will show up as follows:
Many investors get confused between trading hours and cut-off timings. While trading hours are the allotted periods for buying or selling mutual fund units, cut-off timings determine the Net Asset Value (NAV) at which you can buy or sell mutual fund units. Mutual fund cut off time is different for different types of funds.
For all funds except liquid funds, if you buy/invest in a mutual fund before the cut-off timing, you can receive the NAV of the same day.
In September, Sebi had added another clause. To get the same day’s NAV, your money should reach the AMC on the same day too. In case you made a transaction before the cut-off timing and due to some reason the money did not reach the fund house, you may get the next day’s NAV.