Mutual funds are some of the most sought-after investment instruments. They offer good returns and provide multiple options that can suit each investor’s investment goals and preferences. However, as investors’ financial goals evolve, they may find the need to sell or redeem their mutual fund investments. This may be due to sudden financial requirements, the desire to book profits, a change in asset allocation strategy, or any other reason.
The process of selling mutual funds online has revolutionized the investment landscape today. Here, let’s understand how Koshex has simplified this online process, enabling individuals to buy and sell mutual funds seamlessly.
How to Sell Mutual Funds?
Before we dive deeper into the step-by-step guide, it is essential to understand the different ways in which you can redeem your mutual fund investments:
1) OFFLINE METHOD
For redeeming mutual funds offline, you need to visit the nearest Asset Management Company (AMC) branch, mutual fund office, or Registrar’s designated office and submit a redemption request in person. After this request, fill in all the required details, like your name (as the holder), number of units to redeem, folio number, etc. The proceeds from the redemption of the mutual fund will be credited to your bank account.
You can also apply for offline redemption of mutual fund units through a third party, like the mutual fund distributor or agent. You need to submit the signed mutual fund redemption form to the distributor, who will then forward it to the RTA or AMC office.
2) ONLINE METHOD
Online redemption of mutual funds is easier and more convenient than the offline method and can be done from the comfort of your home. Here are the different ways in which you can sell your mutual funds online:
- Through an AMC: Most Asset Management Companies have a dedicated web portal or mobile application that allows you to do all your transactions and avail support services online. If you bought your mutual fund units through an AMC, you can log in to the portal and pick the mutual fund units you want to redeem. You have the option of selling any or all of your units. After filling in the necessary details, you have to submit your redemption request. The amount received through redemption will be directly credited to your bank account.
- Through Demat Account: In case you have used your demat account to purchase the mutual fund units, you can redeem your units from there instantly. As the stockbroker already has most of your details, you can directly make the redemption request. You just need to log in to your demat account from the website or the mobile application and make a request for redemption. After the request is processed, the amount for units redeemed will be directly credited to the bank account registered in the scheme folio.
- Through an Agent or Distributor: You can redeem your mutual funds online through third parties as well, like the agent or distributor. Many of the mutual fund agents and distributors have a web portal or mobile application that allows you to make a mutual fund redemption request online. This makes the redemption process really simple and convenient. However, the agent or distributor may attract certain charges.
Process of Selling Mutual Funds Online in India
After understanding how to sell mutual funds in different ways, we can now go through the step-by-step process of selling mutual funds online in India:
Step 1: Choose the Redemption Platform
Select a suitable platform for redeeming your mutual fund units. This could be your demat account, AMC’s website or app, a third-party online investment platform, or the website of an RTA.
Step 2: Log In to Your Account
If you are an existing investor, log in to your account using your registered username and password. If you are a new investor, create an account by providing the necessary details and completing the registration process.
Step 3: Access Your Mutual Fund Portfolio
Once logged in, navigate to the “Portfolio” or “My Investments” section to access your mutual fund holdings.
Step 4: Select the Mutual Fund/s to Redeem
From the list of mutual funds in your portfolio, choose the one or more mutual funds you wish to redeem.
Step 5: Enter the Redemption Amount
Enter the amount or number of mutual fund units you wish to redeem. Ensure that you are aware of the minimum redemption amount, which may vary between different funds. Also, check the exit load and charges that may be levied for redeeming your mutual fund units.
Step 6: Choose the Redemption Option
You may have the option to redeem your units either in part (partial redemption) or in full (full redemption). Enter your desired option and proceed.
Step 7: Confirm Redemption Details
Review the redemption details, including the scheme name, number of units, and redemption amount, before proceeding.
Step 8: Provide Bank Account Details
You need to check your bank details thoroughly before proceeding. Ensure that your bank account details, such as the account number and IFSC code, are up-to-date on the platform to receive the redemption proceeds.
Step 9: Submit the Redemption Request
After verifying all the information, you can submit the redemption request. You may be asked to enter an OTP (One-Time Password) or use other authentication methods for security purposes.
Step 10: Receive Redemption Proceeds
Once the redemption request is processed, the mutual fund units will be sold, and the proceeds will be credited to your registered bank account within a specified time frame.
In a Nutshell
Selling mutual funds online in India has become a hassle-free and straightforward process. It is much faster and more convenient when compared to selling mutual funds offline. With technological advancements and user-friendly platforms, you can now redeem your mutual fund units in a matter of minutes, saving time and effort.
Koshex is one of the pioneering platforms that allow the online purchase and sale of mutual funds. With 5000+ different mutual funds, you can invest in any of the funds that meet your investment goals and preferences. In addition to this, the platform can assist you in tracking your net worth, automating your savings, and growing your wealth. You can also consider investing in digital gold, smart deposits, or even fixed deposits for diversifying your portfolio. Sign up now with Koshex!
Frequently Asked Questions
Q: Is there any charge or fee for selling mutual funds online in India?
AMCs and investment platforms may charge a nominal transaction fee or exit load for redeeming mutual fund units. This will depend on the scheme and the holding period. You can check the respective terms and conditions before initiating the redemption process.
Q: Can I redeem mutual funds on holidays or weekends?
Yes, While you can place a redemption request online on holidays or weekends, the actual processing of the request typically occurs on the next working day.
Q: Can I redeem mutual funds partially and keep the remaining units invested?
Yes. You can choose to redeem mutual fund units partially and keep the remaining units invested in the fund. This option is beneficial if you need liquidity while retaining some exposure to the fund for long-term growth potential.
Q: Are there any tax implications when selling mutual funds in India?
Yes. There are tax implications when selling mutual funds in India. The gains made from redemption are subject to capital gains tax. The tax rate will depend on the type of fund, the holding period, and the tax rate applicable to the holder of the mutual funds.