Definition
Cut-Off Time (Mutual Fund)
The cut-off time is the daily deadline that decides which day's NAV applies to your mutual fund purchase or redemption.
For most equity and debt funds, transactions with cleared funds received before 3 PM get the same day's NAV; after that, the next business day's NAV applies. Liquid and overnight funds have different, earlier cut-offs and same-day NAV rules tied to fund realisation.
SEBI rules require that the money actually reach the AMC before the applicable NAV is assigned, especially for larger investments. Knowing the cut-off matters when markets are moving sharply and timing affects your purchase price.
Related terms
- SIPA Systematic Investment Plan lets you invest a fixed amount in a mutual fund at regular intervals, usually monthly.
- Liquid FundA liquid fund is a debt mutual fund that invests in very short-term, high-quality instruments, offering low risk and quick access, often used for parking surplus cash.
- NAVNet Asset Value is the per-unit price of a mutual fund — the total value of its holdings divided by the number of units, calculated daily.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.