Cut-off time is the last moment of the day to buy or sell a mutual fund. This deadline is set by SEBI. It decides if you get today’s Net Asset Value (NAV) price or tomorrow’s price.
This rule is mandatory. It makes all fund companies work the same way. It also stops people from making unfair profits. If you miss the cut-off time, you will always get the price from the next trading day. There are no exceptions.
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Understanding Cut-off Time
How Does Cut-off Time Affect Your NAV Allocation?
The cut-off time directly controls the price you pay for fund units. It also controls how much money you can make. If you submit your order before the deadline, you get that day’s NAV price. If you are late, you get the next day’s NAV. The price can change a lot overnight.
A new, strict rule from SEBI began on February 1, 2021. To get the same-day NAV, it is not enough to just submit your order on time. The fund company must get your actual money before the cut-off time.
SEBI Regulations for Mutual Fund Cut-off Timings
SEBI sets all the rules for cut-off times. This makes the market fair and protects you. The rules say all mutual funds must declare their NAV price by 9:00 PM every day.
SEBI made new changes on June 1, 2025. There are now different cut-off times for selling overnight and liquid funds. This makes things work better. The changes also mean brokers must send all client money to a clearing company by the end of the day.
Cut-off Time Rules for Different Fund Categories
Liquid and Overnight Funds Cut-off Schedule
Subscription Cut-off Time for Liquid Funds
If you want to buy a liquid fund, you must do it before 1:30 PM. This gets you the same-day NAV. This earlier time is because these funds are very sensitive to daily interest rate changes. If you invest after 1:30 PM, you get the NAV price from the day before the next working day. Being late is a big mistake.
Redemption Cut-off Time for Liquid Funds
If you want to sell a liquid fund, the cut-off time is 3:00 PM. But new rules from June 1, 2025, offer two ways to do this.
If you sell offline, the 3:00 PM deadline is still the rule. The NAV price you get will be from the day before the next working day. If you sell online, you have until 7:00 PM for overnight funds. This is a huge benefit. It gets you the same-day NAV price.
Equity and Debt Funds Cut-off Timings
Standard 3:00 PM Cut-off Rule
For stock (equity) and bond (debt) funds, the cut-off time is always 3:00 PM. This is for both buying and selling. This makes things simple. This deadline gives fund companies plenty of time to process all orders before the market closes. This keeps everything running smoothly.
Same-Day NAV Processing Requirements
To get the same-day NAV, your order and money must both reach the fund company before 3:00 PM. The fund company must have your real money to invest. This is a rule, not a suggestion. If you send your order after 3:00 PM, you will always get the next day’s NAV. It does not matter when your money arrives.
International Equity Funds Special Timings
International stock funds usually have the same 3:00 PM cut-off time. But some funds might have different times. This is because they invest in other countries. The NAV price for these funds is often late because of the time difference.
Impact of Cut-off Time on Investment Returns
Why Cut-off Time Matters for Your Portfolio
The cut-off time will always have a big effect on the price you pay. It also affects the money you make. When the market is moving fast, even a few hours can cause a big change in the NAV price.
Being on time is the only thing that matters when the market is going up or down. Getting the same-day NAV is the difference between making a big profit and missing a huge opportunity.
Payment Mode and Fund Realization Effects
UPI Payment Processing Timelines
UPI payments are the fastest. You can get the same-day NAV if you pay before the cut-off time. But even if your payment is successful, it does not guarantee the fund company has your money right away. For big investments over ₹2 lakh, it is critical the fund company gets the money on time. The way you pay does not matter.
Net Banking Settlement Cycles
Net banking is always slower than UPI. Big banks like ICICI, HDFC, Axis, Kotak Mahindra, and SBI can get you the same-day NAV if you act fast. NEFT and RTGS payments will always be slow when many people are using them. This will make you miss the cut-off time.
Market Volatility and Timing Considerations
When the market is unstable, the cut-off time is everything. Stock fund NAVs can change a lot in just a few hours. Good timing is the only way to get the best price. For debt funds, timing is important because of interest rate changes. When you invest decides the profit you make.
Practical Examples of Cut-off Time Scenarios
Before Cut-off Time Investment Example
If you invest ₹50,000 in a stock fund at 2:45 PM with a current NAV of ₹125, and your UPI payment is done by 3:00 PM, you will get 400 units at that same-day NAV price.
After Cut-off Time Investment Consequences
If you invest the same ₹50,000 at 3:15 PM, you will get the next day’s NAV. If the NAV jumps to ₹130, you will only get 384.61 units. You lost ₹2,000 just because you were late.
SIP Transactions and Cut-off Time Rules
Systematic Investment Plans (SIPs) must follow the same cut-off rules as one-time investments. You must set up your SIP at least 2 days before you want it to start. This guarantees it will begin in the same month. Banks will always try to send your money before the 3:00 PM cut-off time on your SIP date. But this can fail sometimes.
FAQ
What happens if I invest after the cut-off time?
If you invest after the cut-off time, you will always get the next day’s NAV price. This delay means you will pay a different price because the market moved.
Are cut-off times different for SIP investments?
No. SIP investments must follow the same cut-off rules as one-time investments. The fund company must get your money before the deadline to get the same-day NAV.
How do bank holidays affect cut-off timings?
If there is a bank holiday, all mutual fund orders are delayed until the next working day. Your order will wait until the markets open again.
Can I get same-day NAV with late payments?
No. If your payment is late, you will always get the next day’s NAV price. The way you pay and how much you invest do not matter.
Which payment methods ensure faster processing?
UPI is the only way to pay if you want the fastest processing for the same-day NAV. Net banking from big banks is also fast. NEFT and RTGS are always slow at busy times.
