Investors want to achieve financial freedom. This can only be achieved if you make your money work for yourself. While there are many options for investing that can promise financial independence, few investment options offer the flexibility and returns of mutual funds.
What is mutual fund?
Mutual funds are basically a trust in which investments are pooled from different investors. The fund manager then makes investment decisions for the investors. Mutual funds invest in different sectors of the economy, such as gold, debt market and equity. There are many types of mutual funds in India. They are classified based on their sector, time-horizon, risk factor and other parameters.
How to withdraw money from mutual fund
When you have a long term investment plan, mutual funds can offer great returns. In certain situations, however, you may be forced to liquidate your investment or withdraw your money.
You shouldn’t withdraw any money from the mutual funds until you have experienced one of these situations:
- You have a financial emergency, and need urgent funds
- You have made a significant change in your investment strategy and need to realign your portfolio.
- The investment has achieved the financial goal.
- You want to make the mutual fund that you invested in work better. – You are not sure about the new manager because the fund manager has been replaced.
You need to learn how to withdraw mutual fund money once you’ve decided to withdraw your money.
How can I withdraw money from mutual fund The main purpose of mutual funds investing is to make a profit on your investment. Mutual funds have a time limit for the amount you have invested. This is completely up to you. Some mutual funds have a lock-in period that prevents you from liquidating your investment. You can liquidate your mutual fund investment at any time after the lock-in period is over.
You have two options to withdraw your money from a mutual fund.
These are the details:
- Systematic Withdrawal Plan The SWP is the right choice if you want to earn a steady income while still investing in the scheme.What is a SWP? You can set a fixed amount to be withdrawn from your mutual funds account to your bank account at a specific date or interval. This is typically monthly or quarterly. This money can be used for your financial needs, while your investment continues to make returns. This is basically a gradual way to withdraw money from a mutual fund.This is a good option if your portfolio consists mainly of equity funds. As the deadline approaches, you may wish to reduce risk by taking the money out and reinvesting in debt securities.
- Redemption Of Units If you’re certain that you want to completely redeem your investment, the process is quite simple. However, you cannot do this until the lock-in period is over.
- Log in to your Mutual Fund account.
- Explore the “Online Transactions” page
- Choose the scheme you want to redeem and the number of units.
- Confirm your transaction
- The money will usually be credited to your savings account within 24-72 hours.
