Withdraw Money From Mutual Funds In Easy Steps

The majority of mutual funds are liquid investments, which means they can be withdrawn at any time. Some funds, on the other hand, have a lock-in term. The Equity Linked Savings Scheme (ELSS), which has a 3-year maturity period, is one such scheme. However, once the lock-in period is over, an investor has the option to partially or fully redeem the scheme or to stay engaged for a longer length of time. Let's look at how to get money out of a mutual fund scheme.

What Does Redemption From Mutual Funds Mean?

The process of liquidating your investments is known as withdrawal. This is referred to as redemption in mutual funds.

• You redeem the units when you take money from a mutual fund scheme.
• Also, you sell the units you possess and are paid the corresponding NAV for them.

Take, for example, a Rs. 10,000 investment in a mutual fund plan. You can redeem or sell a certain number of units or withdraw a specific amount of money. 

How To Withdraw Money From Mutual Funds In India?

Withdrawing funds from a mutual fund plan is a straightforward process. Your cash can be redeemed in a variety of ways. 

1. With the Help of a Broker or Distributor

You can withdraw money from a mutual fund scheme through a broker or distributor if you invested through them. You can make contact with your broker and request a withdrawal. You must fill out and submit a withdrawal request form if you wish to make a withdrawal offline. The Asset Management Company would receive the form from the broker.

On the other hand, if the broker offers an online service via a portal or mobile app, you can also redeem online. You can log into your mutual fund account, select the withdrawal option, and enter the number of units you wish to withdraw, and your request will be completed in real-time.

2. Through the Asset Management Company

You can redeem your mutual fund plan directly with the AMC. You have the option of visiting an AMC branch office and submitting an offline withdrawal request, or you can do it online. You can simply go to the AMC's official website or download its mobile app to seek redemption.

3. With the Help of Registrar and Transfer Agents  

They can assist you in investing in mutual fund schemes as well as withdrawing from them through the R & T Agent. By submitting an offline or online withdrawal request to R&T Agents, you can withdraw your funds.

4. Through Your Demat And Trading Account

If you use a Demat and trading account to invest in mutual fund schemes, you can also withdraw from these accounts. To check your mutual fund investment, go into your account, select the amount you wish to withdraw, and submit your request. The redemption will be handled and the funds will be credited to your associated bank account once the request has been validated.

Take Away

If you need money right away, your mutual fund assets can be a speedy supply of cash. The benefit of mutual fund investments is that you can redeem them in unit or money terms, and you can do so partially or completely. Mutual fund investments, in this sense, provide flexibility in terms of redemptions.

You can learn how to withdraw money from a mutual fund and whether to do so online or in person. Moreover, when redeeming your mutual fund units, keep in mind the exit load and tax implications.

FAQs

1. Can I take out money from my mutual fund anytime?
   Yes! With most mutual funds, you can withdraw your money whenever you want. But remember, some funds might have a lock-in period which means you can't touch your money for a certain time.

2. How long does it take to get my money after I ask for it?
   Usually, once you request a withdrawal, it takes about 1-3 business days for the money to land in your bank account. But sometimes, it could take a bit longer, depending on the fund type.

3. Is there a fee for taking out my money?
   Sometimes. Some mutual funds charge an "exit fee" if you take out your money before a set time. Always check the fund's terms or ask your advisor.

4. Will I have to pay taxes when I withdraw?
   Yes, often you might have to. How much tax you pay depends on how long you've had the money in the fund and the amount of profit you made. It's a good idea to chat with a tax expert about this.

5. Can I take out only a part of my money and leave the rest?
   Absolutely! You can withdraw a part of your money and let the rest stay and grow in most mutual funds. You decide how much you want to take out.

6. How do I request for a withdrawal in 2024?
   It's usually easy. If you're working online, just log into your mutual fund account, choose the amount you want to withdraw, and follow the steps. If you're unsure, call up customer support or ask your financial advisor.

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Disclaimer: This article is issued in the general public interest and is meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive and should research further or consult an expert in this regard.