Cut-off timings: which day's NAV you actually get

You pressed "invest" at 2:45pm and got the next day's NAV. Nothing went wrong. The rule that decides which day's NAV you receive is not about when you clicked — it is about when the fund actually had your money, and understanding that distinction saves a lot of confusion.

The rule that matters most

For purchases, the applicable NAV depends on realisation of funds, not on submission of the application.

Both conditions must be met before the cut-off:

1. The application is received, and
2. The money is actually credited to the scheme's bank account.

If your ₹50,000 reaches the AMC at 4:10pm, you get the next business day's NAV even if the order was placed at 11am. UPI and net-banking transfers usually realise quickly; NEFT and RTGS depend on banking hours; a cheque depends on clearing.

This rule applies regardless of the amount. An earlier regime allowed same-day NAV on smaller purchases without realisation; that carve-out is gone, and every purchase — including each SIP instalment — is now on the realisation basis.

The cut-off times

Liquid and overnight funds — purchase: 1:30pm. Redemption: 3:00pm. This is the one that catches people, because it is 90 minutes earlier than everything else and these are exactly the funds used for short-term money where the timing matters.

Liquid funds also carry a distinctive quirk: buy before the cut-off with realised funds and you generally receive the previous day's NAV, because these funds accrue daily and units are allotted from the point the money is available.

All other schemes — 3:00pm, for both purchase and redemption.

Non-business days. Applications on a weekend or market holiday take the next business day's NAV. There is no NAV on a non-business day because the underlying securities did not trade.

What this means for your SIP

Your SIP date is not the allotment date. The bank debit, the transfer to the AMC, and the allotment are three separate events. A SIP dated the 5th typically allots on the 5th if the debit clears in time, and on the 6th or 7th if it does not. Over twenty years this makes no measurable difference to your outcome — which is worth internalising, because a great deal of energy gets spent choosing the "best" SIP date.

The evidence on SIP dates is clear and unglamorous: it does not matter. Across long periods, the difference between the 1st, the 10th and the 25th is noise. Pick a date two or three days after your salary credits, so the mandate never fails for want of balance — that is the only consideration with any real value.

A failed mandate is a real cost, though. A bounced SIP may attract a bank charge and, more importantly, breaks the automation that the whole strategy depends on. See first SIP mistakes.

Redemption: when the money actually arrives

Submit before the cut-off and you get that day's NAV. The payout is separate and follows a settlement cycle:

• Equity funds — typically credited within a couple of business days of the redemption date.
• Debt funds — generally faster.
• Liquid and overnight funds — usually next business day, with instant redemption up to ₹50,000 or 90% of folio value per day at most AMCs, credited within minutes.

Two things to plan around: weekends and market holidays extend everything, and your bank mandate must be current — a redemption to a closed account bounces and the money sits with the AMC until you claim it, which is one route to unclaimed money.

Where timing genuinely matters

For most decisions, none of this changes anything. Three exceptions:

1. Large lump sums near a cut-off. On ₹50 lakh, one day's NAV movement is a real number. Transfer the money a day early and place the order in the morning.

2. Liquid funds for a specific date. If money must be available on a Thursday, the 1:30pm cut-off, the T+1 settlement and any intervening holiday all matter. Work backwards from the date you need the funds.

3. The end of a financial year. A redemption whose NAV falls on 31 March versus 1 April lands the capital gain in a different assessment year, which can change which year's ₹1,25,000 exemption it uses. Worth a moment's thought on a large sale.

Pitfalls to avoid

• Assuming the click time decides the NAV. Realisation of funds does.
• Missing the 1:30pm liquid fund cut-off. The most common timing error, and it is on the funds where dates matter most.
• Optimising the SIP date. It does not matter. Pick one just after payday and never think about it again.
• Forgetting holidays. A long weekend can push a redemption several days.
• Cutting a payment deadline fine. Redeem with margin; settlement is not instantaneous outside liquid funds.
• Trying to time an intra-day NAV. There is one NAV per scheme per day. You cannot buy a dip within the day — that is what ETFs are for, and they carry their own costs.
• Leaving a stale bank mandate on the folio. The redemption will fail after the NAV has already been struck.

Key takeaway

The applicable NAV is set by when the fund's bank account actually received your money, not by when you submitted the order — and this realisation rule now applies to every purchase regardless of size. Cut-off is 3:00pm for most schemes and 1:30pm for purchases in liquid and overnight funds, the one that catches people out. For a long-term SIP none of this affects your outcome, so stop optimising the date and pick one just after payday. It genuinely matters in three places: large lump sums, liquid funds needed on a specific date, and a redemption near the end of a financial year.