Redeeming mutual funds today is simple and mostly instant if you know where to click. In 2026, the process is standardized across apps, AMC websites, and central portals. Whether you’re using an app or going directly to the fund house, the steps remain almost the same.
Let’s walk through it clearly.
Step 1: Choose Where You Want to Redeem
You can redeem mutual funds from three main platforms.
1. Broker / Fintech Apps
Apps like:
- Groww
- Zerodha Coin
- Upstox
Best if:
- You want all investments in one place
- You use multiple fund houses
2. AMC (Fund House) Website
Examples:
- SBI Mutual Fund
- ICICI Prudential Mutual Fund
Best if:
- You want faster processing
- You want instant redemption (for liquid funds)
3. Central Portals
- MF Central
Best if:
- You have investments across many AMCs
- You want one dashboard for everything
Step 2: Log In and Go to Your Portfolio
After logging in:
- Go to Portfolio / Holdings
- Select the mutual fund you want to redeem
You’ll see:
- Current value
- Units held
- Gain/loss
Step 3: Choose Redemption Type
You’ll be asked how you want to withdraw.
Option 1: Amount-Based
- Enter amount (e.g., ₹20,000)
- The system calculates units automatically
Option 2: Unit-Based
- Enter number of units (e.g., 100 units)
Option 3: Redeem All
- Withdraw the entire investment
Step 4: Check for Instant Redemption (If Available)
If you’re invested in:
- Liquid funds
- Overnight funds
You may see an “Instant Redemption” option.
Rules (2026):
- Max ₹50,000 or 90% of value (whichever is lower)
- Money comes within minutes via IMPS
- Works even on weekends
Step 5: Confirm and Authenticate
Once you click redeem:
- Enter OTP sent to your mobile/email
If your mutual funds are in demat form:
- Approve using CDSL/NSDL TPIN
After this, your request is submitted.
Step 6: Understand When You Will Get Money (T+n Rule)
The payout depends on the type of fund.
Settlement Time:
- Liquid / Overnight Funds: T+1 day
- Debt Funds: T+2 days
- Equity Funds: T+2 to T+3 days
- International Funds: T+5 days or more
“T” = transaction day
Important Rules You Must Know
1. 3 PM Cut-Off Time
- Redeem before 3 PM → today’s NAV
- After 3 PM → next business day NAV
2. Exit Load (Penalty)
You may be charged if you withdraw early.
- Equity funds → usually 1% if redeemed within 1 year
- Liquid funds → small fee if withdrawn within 7 days
3. Bank Account Rule
- Money goes only to your registered bank account
- No third-party transfers allowed
4. Tax on Redemption
No tax is deducted immediately.
You must pay later while filing ITR:
- Short-Term Capital Gains (STCG)
- Long-Term Capital Gains (LTCG)
Common Mistakes to Avoid
- Redeeming after 3 PM, expecting same-day NAV
- Forgetting the exit load
- Using the wrong bank account
- Not checking the settlement time
- Panic selling during market dips
Smart Tip (Better Than Manual Withdrawal)
If you need a regular income:
Use SWP (Systematic Withdrawal Plan)
- Fixed amount withdrawn monthly
- No need to manually redeem
- Works like a salary from your investment
Final Thoughts
Redeeming mutual funds online is quick and straightforward once you understand the flow. Just remember:
- Choose the right platform
- Select the correct redemption method
- Check timing and charges
Once you follow these steps, the process becomes smooth and predictable.
