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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.

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This will now be applicable from February 1, 2021.

Read more on Groww: Mutual Fund Buying Rules Changed – Same Day NAV Applicable

Cut-Off Timings on Groww and NAV Applicability

When the investment amount is available to withdraw in Groww balance

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.

When the investment amount is not available to withdraw in Groww balance

Liquid/Overnight Funds:  you will get previous day’s NAV if you are purchasing via netbanking on select banks* and UPI or bank transfer and same day’s NAV if you are purchasing via net banking (on all other banks).

All Other Funds: You get same day’s NAV if you purchase via UPI or bank transfer and net banking on select banks* and you will get next day’s NAV when paying via netbanking on all other banks.

*Select Banks List: Axis Bank, ICICI Bank, HDFC Bank, Yes Bank, SBI Bank, IDFC Bank, Andhra Bank, Karur Vysya Bank, Lakshmi Vilas Bank, Dhanlaxmi Bank, Indian Overseas Bank, Punjab National Bank.

Relevant cut-off timings and NAV applicability is mentioned in the table below. Have a look at this illustration below for better clarity:

Purchase

Payment Mode Investment Amount available to withdraw in Groww Balance Liquid/ Overnight fund  All other funds
Groww cut-off timing NAV applicable day Groww cut-off timing NAV applicable day
Net Banking, UPI or Bank Transfer Yes 12:00 noon T-1 day 2:00 PM T day
UPI or Bank Transfer No 12:00 noon T-1 day 2:00 PM T day
Netbanking (on select banks*) No 7:00 AM T-1 day 12.00 noon T day
Netbanking (on all other banks) No 12:00 midnight T day 12:00 midnight T+1 day
T day is the day on which the order is placed on Groww. If the order is placed on a weekend or holiday, the next working day will be considered as T day and in this case, the previous working day will be considered as T-1 day.

Groww cut-off timing is the cut-off time for placing the order to get the respective NAV mentioned in the table.

*Select Banks List: Axis Bank, ICICI Bank, HDFC Bank, Yes Bank, SBI Bank, IDFC Bank, Andhra Bank, Karur Vysya Bank, Lakshmi Vilas Bank, Dhanlaxmi Bank, Indian Overseas Bank, Punjab National Bank.

What is ‘Available to Withdraw’?

It is the amount you can withdraw from Groww Balance to your bank account.

When will my balance be available to withdraw:

  • When you add money using UPI: Same day, before 6 pm and after 6 pm next working day
  • When you add money using Net-Banking: After 1 working day
  • MF Redemptions: immediately on money being settled in Groww Balance on completion of redemption
  • Stock Sell: After two working days
Redemption
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

What Will Change for My SIP Orders?

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:

AutoPay:

For investors with SIP on AutoPay, there will be no change in the applicable NAV date and order completion of your SIP orders.

BSE Mandates:

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+2
Expected NAV date T (No change) T+4/5 T+3/4
Expected order completion date T+2 (No change) T+5/6 T+4/5

Note:
• T is the transaction/due date for your SIP instalment.

  • All the dates mentioned are working days. Any holiday/weekend in between will result in the extension of this date.
  • These are only tentative dates by BSE and are subject to change.

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:

  • Go to the Profile section on the app
  • Find the ‘My Account’ section
  • Select Bank and Autopay
  • You will see your verified bank account on the next page. Click on the bank.
  • On the next screen, you will be able to see your account details and the mandate you have.

They will show up as follows:

Autopay Mandates

  • Autopay via OTP
  • Autopay via Form 

BSE Mandates

  • AutoPay via Biller
  • AutoPay via One-time mandate

What are Cut-Off Timings in Mutual Funds?

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. Cut-off timings are 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.

Happy Investing!

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