Redeeming mutual fund after 20 years

Q & A Forum › Category: Mutual Funds › Redeeming mutual fund after 20 years

fahedakhan asked 8 years ago

Dear Mr. Srikanth.... Good day..how are you? Hope you are doing well. I have a small query ..it seems very awkward to ask such question..but I hope you will not mind ..Suppose I had been investing since 20 years and now my investment value is 5 crores..and I want to redeem my all money..how the fund house will give me such a huge money?? Will they create any problem?? Because I have never such a person who ever redeemed such a huge corpus.As I thought may be fund houses can create problem or make some hindrances to pay such a big amount...Also how much time they will take for such an amount to deposit?? My all mean to say that can I trust on fund houses? I request you to reply please

1 Answers

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Sreekanth Staff answered 8 years ago

Hi, I am doing fine, thank you! How about you? Very good question.... You can definetly trust mutual fund houses (AMCs). Our mutual fund industry is a very well regulated one. The primary function of a fund house is to collect the monies from a pool of investors and then invest in certain securities (stocks/bonds) based on schemes' investment objectives. When an investor redeems units at prevailing NAV (it can be of any worth), they just redeem those units (meaning the fund house has to sell certain portion of corpus) and re-pay the investor. For performing all these works, they charge EXPENSE Ratio (for meeting marketing, commission, administration, allocation fees etc). Redemption proceeds for liquid or debt-oriented units are paid within one-two working days.For equity mutual funds, the amount is paid back to investors within 4-5 working days (max).

fahedakhan replied 8 years ago

Dear Mr. Shreekanth,

Thank you for your response. I asked because I never met or saw a person who requested to redeem such a huge corpus. Because it is easy to pay 10-20 lakhs but 5-6 crores is big one..therefore, I thought that these fund houses may create some problem if redemption request is for bulk amount …for example in any government office in India , if you ask for your PF after retirement then government officials will keep you roaming here and there and after taking a good bribe ..they will process your file or documents.

Regards