Will 24x7 NEFT make MF redemption any faster?

RBI has recently instructed the banks to make the NEFT payments system available 24/7 from December 16 onwards. Since NEFT transactions would be settled on the same day, would it also help mutual fund investors receive the redemption amount any faster? :thinking:

If you’re talking about your investments in MF through Zerodha, I don’t think it would happen any faster. I say this because, when you redeem through a Mutual fund intermediary, the redemptions are routed to your account through your broker. The broker will have to credit your trading ledger, instead of the funds directly getting credited to your bank account. The broker inturn gets credit from the Clearing corporation of the Exchange, BSE in our case and not from the AMC, AMCs credit in line with the settlement cycle set for each fund.

@faisr If you’d want to add anything.

@VenuMadhav Thanks for explaining how the MF redemption process works in Demat mode. If I am not wrong, the MF redemption process would be faster if the MF investment is with AMC (non-Demat account). I am not talking about the T+X days of processing of the redemption instruction. But once the funds are released by the AMC, bank credit would be faster now with 24x7 NEFT.

This gives investing directly with AMC a little edge over Zerodha where the funds can be withdrawn only after 2 days (The withdrawable balance is updated after T+2 days for equity).

U said is applicable in normal regular fund .
What if it is a direct fund investment ?
Awaiting for the reply…

As explained on the other post, T+2 is only for Equities. MF credits can be withdrawn the day you receive credit to your account.

Thanks for the information.

But I think the following still holds true for the investment of MF in physical format (non-demat format) at AMC website.

Post-release of redemption funds by AMC, the bank transfer would be faster with 24x7 NEFT. And automatically. No manual intervention required.

Bank transfers are automatic anyways, I don’t think this you’ll receive funds any sooner, since the AMCs were making payouts during banking hours itself (within the 7:00 pm deadline NEFT had earlier).

You can expect payouts to hit your bank account the same day when Zerodha processes them post trade process, after the 24X7 NEFT implementation.

Why can’t you be satisfied in life? Why does everything have to be a complaint?

Automatic credit to bank account (you just clicked redeem button at AMC website in case of physical MF)


Manual intervention (first click redeem button in Coin and then wait for redemption value to be credited in trading account and then manually initiating bank withdrawal process in case of Zerodha)

I hope I have articulated the difference clearly.

Now, thinking of a solution, while redeeming a MF in coin, if you let user do a tick mark “withdraw to bank also” when he is redeeming, would make the process automatically like AMC website. Once funds are available in trading account, it automatically initiates the withdrawal process in the background without requiring the investor to manually initiate the withdrawal process. Did you get my point?

I don’t think it is a complaint. Moreover, if @nithin would have been satisfied with the existing Brokers in the market, would he have created Zerodha? Why talk about anyone else, if you were satisfied elsewhere, would you have been here. So I have a request, jump into a conversation only if you are adding value to it. Otherwise, silence is golden. That’s what the guidelines of this forum also says.

It is not a complaint. It’s a suggestion. That’s how economies and civilization grows. If everyone is satisfied with whatever is available, it leads to decay. Imagine if @nithin and his team were satisfied with the existing brokerage system a decade ago, what would have happened? A million retailers would not have been in the markets. Brokerages would still have been high. Educational modules by @Karthik would have been missing. And the wonderful technology Team Zerodha brings for their customers would have been missing. Lastly, you would not have been on this forum spreading your pessimism and dissing others. These forums are needed for people in charge to know people’s problem and solve them. Doing so makes customers happy and increases bussiness for these companies. As far as know Nithin was involved in a traders forum before founding Zerodha and there he learnt the problems traders face while trading. Which guided him what to do in Zerodha to serve traders.

@siva @VenuMadhav @nithin @Bhuvan and other admins, this is a personal comment on me crossing the line. please render it against the guidelines of the forum and decide for yourself.

We’ll see what we can do here.

The post has been flagged and removed. @RahulKhanna trust level on the forum has been downgraded to Level 0. New posts/comments from the user will be public only after one of the moderator’s approval.