Mutual Fund Redemption / Withdrawal Guide India 2026

Withdrawing money from mutual funds is simple — but knowing when and how to do it (to minimize tax and exit load) is important. This guide covers redemption via Groww, Zerodha Coin, CAMS, and direct AMC methods.

Before Redeeming — 3 Things to Check

1. Exit Load

Most equity funds charge exit load if redeemed within 1 year:

• Exit load: Typically 1% if redeemed within 12 months
• After 12 months: Zero exit load
• ELSS funds: Cannot redeem before 3 years (lock-in)
• Liquid/overnight funds: No exit load (or very short — 1–7 days)

2. Capital Gains Tax

Timing redemption to minimize tax:

• Hold equity funds for ₹1.25 lakh LTCG exemption per year
• Harvest gains annually up to ₹1.25 lakh — pay zero LTCG

3. Current NAV

Redemption is processed at the end-of-day NAV for orders placed before the cut-off time:

• Equity funds cut-off: 3:00 PM (orders before 3 PM get same-day NAV)
• Debt/liquid funds cut-off: 1:00–2:00 PM
• Orders after cut-off: Next business day's NAV

How to Redeem — Method 1: Groww App

1. Open Groww app → "Mutual Funds"
2. Select the fund you want to redeem
3. Tap "Withdraw"
4. Choose: Partial (enter amount/units) or Full (all units)
5. Confirm: Review NAV, exit load, tax estimate
6. Enter MPIN / Biometric → Submit
7. Money in bank: 1–3 working days (equity funds: T+2/T+3; debt: T+1)

How to Redeem — Method 2: Zerodha Coin

1. Zerodha Coin (coin.zerodha.com or Kite app) → "Mutual Funds"
2. Select fund → "Redeem"
3. Enter units or amount
4. Confirm → Order placed
5. Settlement: T+1 (debt) / T+2–3 (equity)

How to Redeem — Method 3: CAMS (Direct Mutual Fund Redemption)

CAMS is the registrar for major fund houses (HDFC, ICICI, SBI, Aditya Birla MF, Nippon, Kotak, Axis, Mirae Asset, DSP).

1. Go to camsonline.com
2. Login: PAN + OTP on registered email/mobile
3. "Transact" → "Redeem"
4. Select fund + folio
5. Partial (enter amount) or full
6. OTP confirmation → Submit
7. Settlement: T+2 (equity) / T+1 (debt)

How to Redeem — Method 4: KFintech (MFCentral)

For Franklin, Sundaram, Tata, Union, SBI (partially), and others registered with KFintech:

1. mfs.kfintech.com → Login with PAN + OTP
2. Transactions → Redemption
3. Select fund → Enter amount → Submit

How to Redeem — Method 5: Directly with AMC

Every AMC (Asset Management Company) has its own portal:

• HDFC Mutual Fund: hdfcfund.com
• SBI Mutual Fund: sbimf.com
• ICICI Prudential: ipruonline.com
• Nippon India: mf.nipponindiaim.com

Process: Login → Transact → Redeem → OTP confirmation.

SIP — How to Stop and Redeem Partially

To stop SIP (no more automatic deductions):

• Groww: SIP → "Pause" or "Cancel" (takes effect 30 days before next instalment)
• CAMS: Transact → SIP Cancellation
• Minimum 30 days notice required

SIP cancellation doesn't automatically redeem existing units — existing corpus remains invested until you redeem separately.

Partial redemption while SIP continues:

• Redeem any amount at any time (no restriction)
• SIP continues as usual
• Good for periodic profit-booking

ELSS — Redemption Rules (3-Year Lock-In)

ELSS (Equity Linked Savings Scheme) has strict lock-in:

• Cannot redeem ANY units before 3 years from purchase date
• SIP units: Each SIP instalment has its own 3-year lock-in
• Example: SIP in Jan 2022 → Can redeem those units from Jan 2025; SIP in Feb 2022 → from Feb 2025

After 3 years: Redeem like any other equity fund. LTCG tax applies (12.5% on gains > ₹1.25 lakh).

Mutual Fund Redemption Timeline

T = Transaction date (day order is placed and confirmed before cut-off)

Tax-Efficient Redemption Strategy

For equity funds held > 1 year:

• Redeem systematically — up to ₹1.25 lakh gains per year = zero tax
• E.g., If you have ₹3 lakh LTCG: Spread over 3 years = pay minimal tax
• Or: "Tax harvesting" — redeem ₹1.25 lakh gain each March, reinvest same day (resets holding period)

For debt funds:

• All gains taxed at slab rate regardless of holding period
• No tax advantage from timing — redeem when needed

Frequently Asked Questions

I redeemed mutual fund on Groww — when does money come to bank? Groww processes redemption → AMC executes at EOD NAV → Settlement: Equity T+2/T+3 (2–3 working days excluding weekends/holidays). Debt: T+1 (next working day). Check Groww → "Orders" for exact settlement date.

Can I redeem mutual fund on a Sunday? You can place the order anytime (Groww/Zerodha accept 24×7). But NAV assigned is: Sunday order → Processed at Monday's NAV (or next market day NAV). Settlement starts from that day.

MF redemption on holiday — what happens? Order placed on market holiday: Processed on next working day. Settlement from that date.

I'm an NRI — can I redeem Indian mutual funds? Yes — NRI mutual fund units can be redeemed. Proceeds go to NRE/NRO account as per original investment. TDS applicable: 15% STCG / 10% LTCG for NRI investors (deducted by AMC before crediting).

Groww shows lower NAV than what I bought at — should I redeem at a loss? Don't redeem at loss unless you need the money urgently. Market downturns are temporary for good diversified equity funds. If invested for 3+ years and fund is fundamentally good: Stay invested. Only redeem at loss if: (1) You need emergency cash or (2) The fund is consistently underperforming its benchmark for 3+ years.