Mutual Fund Cut-Off Time: Which Day's NAV You Get
You invested at 2pm but got the next day's price — and it cost you. The little-known cut-off time rule decides exactly which NAV your money buys. Here's how it works.
Priya had a bonus to invest. On a Friday afternoon, she saw the market dip, thought 'great, cheaper units!', and hit invest at 2:30pm. Come Monday, she checked her statement — and discovered she'd been allotted units at a higher price than Friday's. She was baffled. She'd clicked buy on the dip. What went wrong?
Priya bumped into one of the least-understood rules in mutual funds: the cut-off time. It quietly decides which day's price your money actually buys — and if you don't know it, you can lose the very dip you were trying to catch.
First, a quick refresher on NAV
A mutual fund's price is its NAV (Net Asset Value) — the per-unit value of everything the fund owns, calculated once a day after markets close. Unlike a stock, you can't buy a fund at a live, second-by-second price. You get end-of-day NAV. If you're hazy on this, our NAV explainer covers it in plain English. The cut-off time is simply the rule for which day's end-of-day NAV applies to your transaction.
The rule: it's about when your money reaches the fund
Here's the part people miss. For most funds, the deadline that matters isn't just when you click buy — it's whether your money actually reaches the fund house by the cut-off time. The broad framework works like this:
- Equity and most debt funds: cut-off is 3:00pm. If your application is in AND the money reaches the fund by 3:00pm on a business day, you get that day's NAV. After 3:00pm, you get the next business day's NAV.
- Liquid and overnight funds: cut-off is 1:30pm, and here a special rule applies — you can get the previous day's NAV, but only if the money is credited to the fund before the cut-off. See our liquid funds guide.
- The catch for large amounts: for purchases, realisation of funds matters. If your payment lands after cut-off, you slip to the next day's NAV — regardless of when you clicked.
So Priya's Friday 2:30pm click was fine on time — but if her payment only settled after 3:00pm, or after a weekend, her transaction rolled to Monday's NAV. By Monday the market had bounced, so she paid more. The dip she saw was real; the price she got wasn't from that moment.
You don't buy a mutual fund at the price on the screen when you click. You buy at the NAV of the day your money actually reaches the fund, decided by the cut-off time.
Why this matters more than it sounds
For a long-term SIP investor, a one-day NAV difference is basically noise — over 15 years, whether you got Friday or Monday's price on one instalment won't move your wealth. This is not something to obsess over or try to game. But it matters in three practical situations: parking a large lumpsum (a 1% move on ₹10 lakh is ₹10,000), moving money in liquid funds where every day of NAV counts, and simply understanding your statement so you're not confused like Priya.
The cut-off rule exists for fairness, not for you to scalp intraday dips. Mutual funds are end-of-day instruments by design. If catching exact prices matters that much to you, that's a stocks-and-ETFs mindset — and even then, timing rarely beats a steady SIP over the long run.
What this means for you
Two simple habits. First, for time-sensitive or large transactions, initiate them well before the cut-off — ideally by early afternoon on a business day — and account for how long your payment takes to settle. Second, don't lose sleep over it for your regular SIP; the whole point of a SIP is that you stop trying to time the market, and rupee-cost averaging handles the ups and downs for you. Knowing the rule just means your statement will never surprise you again. Want to see how little one instalment's price matters over years? Play with the SIP calculator.
- Mutual funds are priced once a day at NAV, calculated after markets close — you don't get a live price.
- The cut-off time (3:00pm for equity/most debt funds; 1:30pm for liquid/overnight funds) decides which day's NAV you get.
- For purchases, what matters is when your money actually reaches the fund — a late payment pushes you to the next day's NAV.
- A one-day NAV difference is noise for long-term SIPs but can matter for large lumpsums and liquid funds.
- Don't try to time NAV to the minute; initiate time-sensitive transactions well before the cut-off instead.
The cut-off time is one of those small mechanics that quietly explains a confusing statement. Now you know: your money buys the NAV of the day it lands, not the day you daydreamed about the dip. For your regular SIP it barely matters — but for a big one-time investment, a little timing awareness keeps you from Priya's Monday-morning surprise.
Over to you: have you ever been surprised by the price you got on a mutual fund purchase? What happened? This article is educational and not investment advice. Cut-off time rules are set by SEBI and can be updated; confirm the current rules with your fund house. Mutual funds are subject to market risk.
Frequently asked questions
What is the cut-off time for mutual funds in India?
For equity funds and most debt funds, the cut-off time is 3:00pm on a business day. If your application is submitted and the money reaches the fund by 3:00pm, you get that day's NAV; after 3:00pm you get the next business day's NAV. For liquid and overnight funds, the cut-off is 1:30pm, with a special rule that can allow the previous day's NAV if funds are credited before the cut-off. These rules are set by SEBI and can change, so confirm the latest with your fund house.
Why did I get a different NAV than the day I invested?
This usually happens because of the cut-off time rule. For purchases, the NAV you receive depends on when your money actually reaches the fund house, not just when you clicked buy. If your payment settled after the cut-off time or over a weekend or holiday, your transaction rolls over to the next business day's NAV, which can be higher or lower than the price you saw when you placed the order.
Does cut-off time matter for my SIP?
For a long-term SIP, the cut-off time makes very little difference. A one-day NAV difference on a single instalment is minor noise over many years of investing, and rupee-cost averaging smooths out the ups and downs. The cut-off rule matters far more for large one-time lumpsum investments and for liquid funds, where each day's NAV can have a bigger impact.
How can I make sure I get the same day's NAV?
To improve your chances of getting the same day's NAV, submit your application and ensure the payment reaches the fund well before the cut-off time — ideally by early afternoon on a business day — and account for how long your payment method takes to settle. Payments that clear after the cut-off, or on weekends and holidays, will be processed at the next business day's NAV. This is educational information, not investment advice.
Ex-equity research analyst who quit spreadsheets to explain money the way she wishes someone had explained it to her at 22. Writes about investing and markets.
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Disclaimer: This article is for educational and informational purposes only and does not constitute investment, financial, or tax advice. InvestDawn is not a SEBI-registered investment advisor. Please consult a qualified professional before making financial decisions. Read our full disclaimer.
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