mutual fund dividend pay out option


If i invest in Mf with dividend payout and withdraw some/full amount after few months , shall I be paid dividend and on which part (only invested part or prorated).

When it is ideal to exit fund (dividend option)?


If you have redeemed the units partially before the record date, then you would receive the dividends as per the residual units in your account. If you have redeemed the units after the record date then you would receive the dividends as per the actual number of units that were allotted to you during the time of purchase.

There is no ideal time as such, it depends on your convenience. Also, investing in the growth option is a better option than investing in a dividend as explained in this post.

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Dividend options aren’t a good investment - learn why via this article on Everything you need to know about MF Dividends& Dividend Plans. It has relevant & recent info from May 2019, and broad topics/points are:

  • Basics of Mutual Fund Dividends
  • Dividend Plans do not equate to Dividend Strategies
  • Dividend Impact on NAV
  • Difference with Stock Dividends
  • Double Taxation

Hope this helps, shout out if you have feedback or more questions! Happy investing! :slight_smile: