I sold a liquid fund today and I got a confirmation SMS saying that the transaction went through. Liquid funds have T+1 settlement, so what time tomorrow will the funds become available in Zerodha?
If you sold a liquid fund today and its settlement time is T+1 days, then the funds will be credited to your account at the end of T+1 day. What time does the settlement process take place? @faisr
So if I sold on 30th, it’ll be the end of the next day, after trading hours of 31st? Shouldn’t it be the beginning of the day? Because the whole point of a liquid fund is liquidity, and this means your money is not in the market for 1 full-day?
Thanks for the reply!
The settlement happens on T+1 day and the funds are credited to your account at the end of T+1 day, post 10am. This settlement cycle is decided by the AMC managing fund.
The funds will be credited to your trading account on T+1 day between 10 - 11 am
You were perfectly right. Just one more question, if I redeem liquid funds on Friday for T+1, will they only be settled on Monday and not Sat/Sun?
The amount will be credited to your account on Monday since that is the next working day.
Is instant redemption available in Coin ? Some Fund house like Reliance & DSP is providing instant redemption facility in some of their liquid funds. If i invest in such schemes through coin, can i instantly redeem ?
There is no instant redemption facility available through COIN. Since the units have to debited from the demat account and the same has to be communicated to the depository and respective AMC so instant redemption will not be possible. The minimum settlement time is T+1 day if its a liquid fund.
@faisr, so after T+1 day, when my fund comes back to kite funds, can I withdraw it immediately or same withdrawal time limit of 24 hours will be applied?
There is a new option to invest in overnight mutual fund, Wile withdrawing of funds from console.
@faisr Can you please tell me how it works? Is it like normal MF (order will be placed 1:30 PM and T+2 days for units to credit) or It will be auto redeemed next day and the funds will be credited back to the trading account. And what about the returns.
The same period would be applicable since the amount will be withdrawn from your trading account.
It will be processed similar to all other orders placed through coin. So, if you placed an order in the overnight fund through withdrawal page in console today at 7 pm then it will be placed on next working day and you will receive allotment of the units on T+2 days. If placed today before cut-off then you will receive the units tomorrow.
This is a convenient option than keeping your money idle in your savings account since the yield is more. It fetches you 5.4% annually. Also, this way you are more prone to spend less and save more