NAV Cut-off Time: Which NAV Applies? (NISM V-A)

Short answer: for liquid and overnight funds, a purchase must reach the AMC, with the money available for use, by 1:30 pm; it then gets the NAV of the previous day. For all other schemes the cut-off is 3:00 pm, and a purchase gets the NAV of the day the money becomes available to the fund. Redemptions in every scheme have a 3:00 pm cut-off. This is one of the most-tested rules in NISM Series V-A (Chapters 5, 7 and 9).

Cut-off times and the NAV you get

Two conditions decide a purchase NAV: the application must be in by the cut-off and the money must be credited and available for utilisation by the fund. If the money arrives later, the NAV of the day it becomes available applies, however early the form was submitted.

Since 1 June 2025, SEBI allows online redemption requests in overnight funds until 7:00 pm; offline requests keep the 3:00 pm cut-off. The workbook rule above is what the exam tests unless it asks about this specifically.

Why liquid and overnight funds are different

Liquid and overnight funds are used to park money for a day or a few days, so their NAV changes by very small amounts every day. If purchases got that day's NAV, a large investor could come in for a few hours and take part of the day's interest earned by existing investors. The earlier 1:30 pm cut-off and the previous-day NAV stop that.

Worked examples

1. Liquid fund purchase before 1:30 pm

Riya submits a liquid fund purchase at 11:00 am on Tuesday, and the money reaches the fund's account at 12:30 pm. Both are before 1:30 pm, so she gets Monday's NAV, the day immediately before the day the money was received.

2. Equity fund purchase where the money arrives late

An investor submits an equity fund purchase at 1:30 pm on Tuesday, but the money reaches the AMC at 3:30 pm on Wednesday. The form was in time, but the money was not available until after Wednesday's 3:00 pm cut-off, so the Thursday NAV applies.

3. Equity fund redemption either side of 3 pm

A redemption request submitted at 2:45 pm on Tuesday gets Tuesday's NAV. The same request submitted at 3:15 pm gets Wednesday's NAV.

Exam traps

• For a liquid fund purchase in time, the answer is the previous day's NAV, not the same day's.
• The 1:30 pm cut-off applies only to purchases in liquid and overnight funds. Their redemptions use 3:00 pm.
• For purchases, "application received" is not enough. The money must be available for utilisation.
• There is no separate 2:00 pm cut-off for debt funds. Debt schemes other than liquid and overnight funds use 3:00 pm.

Practise the full chapters: Chapter 5: Scheme Related Information, Chapter 7: NAV, TER and Pricing of Units and Chapter 9: Investor Services.

Practice questions

From BullWiser's NISM V-A question bank. Try each one before opening the answer.

Q1. For subscriptions in Liquid and Overnight Funds, if an application along with funds is received before the cut-off time of 1:30 PM on a business day, what NAV is generally applicable?

1. A. The NAV of the previous business day.
2. B. The NAV of the same business day.
3. C. The NAV of the next business day.
4. D. The NAV applicable for equity funds.

Q2. For subscription applications in Liquid and Overnight mutual fund schemes, to receive the Net Asset Value (NAV) of the immediately preceding business day, what is the usual cut-off time for receiving the application and funds?

1. A. 1:30 PM
2. B. 3:00 PM
3. C. 5:00 PM
4. D. 11:00 AM

Q3. For investments in Liquid and Overnight funds, to receive the previous day's NAV, what is the latest time by which funds must be available with the AMC?

1. A. 3:00 PM on the transaction day.
2. B. 1:00 PM on the transaction day.
3. C. 2:00 PM on the transaction day.
4. D. 1:30 PM on the transaction day.

Q4. An investor submits an application to purchase units of an equity-oriented mutual fund scheme at 2:45 PM on a business day. Assuming all necessary documents and funds are received by the AMC before the cut-off, which NAV will be applicable for this transaction?

1. A. The NAV of the previous business day.
2. B. The NAV of the same business day.
3. C. The NAV of the next business day.
4. D. The investor can choose between the NAV of the same or next business day.

Q5. An investor submits a purchase application for an equity-oriented mutual fund scheme worth ₹1,50,000 at 1:30 PM on a Tuesday. The funds are realized by the AMC's designated bank account at 3:30 PM on Wednesday. Assuming both days are business days and the cut-off time for non-liquid funds is 3:00 PM, which NAV will be applicable for this transaction?

1. A. Tuesday's closing NAV.
2. B. Wednesday's closing NAV.
3. C. Thursday's closing NAV.
4. D. The NAV of the next business day after realization of funds.