How do I get my returns in Mutual Funds?
To get returns from your investments in mutual funds, you have a few options depending on your investment strategy and the specific mutual fund you have invested in. Here are the common ways to receive returns from mutual funds:
Dividends: Some mutual funds, particularly equity funds and dividend-focused funds, distribute dividends to their investors. These dividends are typically paid out periodically, such as quarterly or annually. The dividends can be directly deposited into your bank account or reinvested back into the fund to purchase more units.
Capital Gains: Mutual funds generate capital gains when the fund's holdings are sold at a profit. If you hold units of the mutual fund, you can receive capital gains when the fund distributes them. Similar to dividends, you can choose to have capital gains reinvested or receive them as a direct payout.
Systematic Withdrawal Plan (SWP): An SWP allows you to set up regular withdrawals from your mutual fund investment. You can specify the amount and frequency of the withdrawals, such as monthly or quarterly, to receive a regular income stream. The withdrawals can be a fixed amount or a percentage of your investment.
Redemption: If you wish to access your investment in mutual funds entirely, you can initiate a redemption. This involves selling some or all of your mutual fund units. The proceeds from the redemption will be sent to your registered bank account. It's important to note that selling mutual fund units may result in taxable capital gains or losses, depending on your jurisdiction and the holding period.
To implement any of these options, you'll need to contact the mutual fund company or your investment intermediary, such as a broker or an online investment platform. They will guide you through the necessary steps and documentation required for the specific method of receiving returns from your mutual fund investment.
To get your returns from mutual funds, you can also follow these general steps:
Contact the Mutual Fund Company: Get in touch with the mutual fund company where you have invested your money. You can typically find their contact information on their website or your investment documents.
Submit Redemption Request: Inform the mutual fund company that you want to redeem your investment and request the necessary redemption form or instructions. Some mutual fund companies also allow online redemption through their website or mobile app.
Fill out the Redemption Form: Fill out the redemption form with the required details, such as your folio number (unique identification number for your investment), the amount you want to redeem, and any other specific instructions.
Submit the Form: Send the filled-out redemption form to the mutual fund company through the designated channel. This can be via mail, email, or through their online portal, depending on the options provided by the company.
Provide Bank Account Details: Ensure you have provided the correct bank account details where you want the redemption proceeds to be credited. This is usually done while filling out the redemption form. Double-check the information to avoid any errors or delays in the payment.
Wait for Processing: The mutual fund company will process your redemption request. The time taken for processing may vary depending on the mutual fund company and the type of fund. It is typically a few business days, but it could be longer in some cases.
Receive Payment: Once your redemption request is processed, the mutual fund company will transfer the redemption proceeds directly to your bank account. You should receive the funds within a few business days.
It's important to note that mutual funds may have certain rules and restrictions regarding redemption, such as exit loads or lock-in periods for specific types of funds. Make sure to review the terms and conditions of your investment and consult with a financial advisor if needed.
