Cut-off Timing — When Does Your NAV Apply?
The cut-off time decides which day's NAV a purchase or redemption gets. This lesson sets out the cut-offs for liquid and overnight funds and for other schemes, why the money must also reach the scheme, and how switches and exchange trades are treated.
Why there is a cut-off
Most schemes have one NAV for each business day (liquid and overnight funds have one for every calendar day), and it is worked out after the day's prices are known. Purchase and redemption requests arrive throughout the day, most of them before that day's NAV exists.
The cut-off time is the rule that fixes, in advance, which day's NAV each request gets. A request after the cut-off is processed at the NAV applicable to the next business day.
Schemes other than liquid and overnight funds
For purchases the cut-off is 3:00 PM. The day's NAV applies only if the application is received and the money is available to the scheme by then, whatever the amount. An application alone is not enough: if the money becomes available later, the NAV of that later day applies.
For redemptions, a request received by 3:00 PM gets the same day's NAV.
Liquid and overnight funds
For purchases the cut-off is 1:30 PM. A purchase received with the money available before the cut-off gets the previous day's closing NAV, not the NAV of the day itself. If the money becomes available later, a later NAV applies.
For redemptions the cut-off is 3:00 PM, and online redemptions in overnight funds are accepted up to 7:00 PM.
Switches, exchange trades and payouts
A switch is a redemption from one scheme and a purchase in the other. Each leg gets the NAV that its own cut-off rule gives it, so the two NAVs can fall on different days, for example when the target is a liquid fund.
ETF units bought or sold on a stock exchange trade at market price, outside these cut-offs, and international schemes are also outside these uniform cut-offs. The cut-off decides the NAV, not the payment date: redemption proceeds are paid within 3 working days, or 5 for schemes with 80% or more overseas.
Rules at a glance
Three requests, three outcomes (illustrative; every day is a business day)
On Tuesday at 2:40 PM Leela applies for units of an equity fund, paying by a transfer that reaches the scheme only on Wednesday morning. Her application was in time, but the money was not available by 3:00 PM on Tuesday, so she gets Wednesday's NAV.
On Wednesday at 1:00 PM Farhan's purchase in a liquid fund is received with the money available. He gets Tuesday's closing NAV.
On Thursday at 3:20 PM Gauri submits a redemption request in an equity fund. It is after the cut-off, so Friday's NAV applies.
What a one-day difference does to units (assumed NAVs)
- Assume a purchase of ₹1,00,000 in an equity fund. Stamp duty = 0.005% × ₹1,00,000 = ₹5, leaving ₹99,995 to be converted into units.
- If Tuesday's NAV of ₹50.00 applies: ₹99,995 ÷ ₹50.00 = 1,999.90 units.
- If the money is available only on Wednesday and Wednesday's NAV is ₹50.50: ₹99,995 ÷ ₹50.50 = about 1,980.10 units.
- If Wednesday's NAV were ₹49.50 instead: ₹99,995 ÷ ₹49.50 = about 2,020.10 units.
Result. The day whose NAV applies changes the number of units allotted, and it can work either way: the next day's NAV may be higher or lower, and it is not known when the request is made.
Key points
- Purchases in schemes other than liquid and overnight funds: cut-off 3:00 PM, with the application received and the money available to the scheme by then.
- Redemptions in those schemes: a request received by 3:00 PM gets the same day's NAV.
- Liquid and overnight fund purchases: cut-off 1:30 PM; the previous day's closing NAV applies if the money is available before the cut-off.
- Liquid and overnight fund redemptions: cut-off 3:00 PM; online redemptions in overnight funds up to 7:00 PM.
- A request after the cut-off gets the NAV applicable to the next business day.
- A switch is a redemption and a purchase, each under its own cut-off rule.
Common misunderstandings
- An application before 3:00 PM is not enough for a purchase: the money must also be available to the scheme by the cut-off.
- A liquid fund purchase before 1:30 PM does not get that day's NAV: it gets the previous day's closing NAV.
- There is no NAV for the minute a request is made: a scheme has one NAV for each business day.
- A switch is not one transaction with one NAV: it is a redemption and a purchase, each under its own cut-off rule.
Questions people ask
Does the size of a purchase change which NAV applies?
No. For schemes other than liquid and overnight funds, the NAV of the day the money is available before the cut-off applies whatever the amount. The older ₹2 lakh threshold is gone.
Until what time can an overnight fund be redeemed online?
Online redemptions in overnight funds are accepted up to 7:00 PM. The general redemption cut-off for liquid and overnight funds is 3:00 PM.
Do these cut-offs apply to ETF units bought on a stock exchange?
No. Units bought or sold on an exchange trade at the market price at that moment, outside these cut-offs.
What this lesson relies on
- SEBI Master Circular for Mutual Funds (20 March 2026) — Chapters 9 and 10, on NAV, cut-off timings and pricing of units; timelines for redemption proceeds
- Indian Stamp Act, 1899 — stamp duty on mutual fund purchases (from 1 July 2020)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.