SBI moves instant redemption facility to liquid fund

Types of SBI Mutual Fund Investment Schemes

SBI Mutual Fund has moved its instant redemption facility to SBI Liquid Fund from SBI Insta Cash Fund. This is to comply with the SEBI norm of offering this type of facility only in liquid funds. Instant Redemption allows investors to get money from their liquid fund immediately into their bank account rather than waiting for one day as what happens with conventional liquid fund redemptions. SEBI has also specified a daily upper limit of Rs 50,000 per investor for this facility.

What is instant redemption?

Instant redemption allows you to get your liquid fund money into your bank account on any day (including holidays and weekends) and at any time. The proceeds get credited instantly rather than the typical one day wait for liquid funds. Equity funds usually take three business days for proceeds to be credited and other debt funds take two business days. As per SEBI norms, the daily upper limit per investor on this type of redemption is Rs 50,000 or 90% of the value of the investor’s holding whichever is lower.

If redemption request is received before 3 pm, the investor gets the same day’s NAV or previous day’s NAV, whichever is lower. If the redemption request is received after 3 pm, the investor gets the same day’s NAV or next day’s NAV whichever is lower.  The facility is only available to resident individuals. You have to give the redemption request on the website of the fund house after registering on the website.

SBI Instant Redemption

SBI MF had initially introduced the instant redemption facility in January 2017. This was introduced in SBI Savings Fund, an ultra short-term debt fund. In June 2017, SBI moved the facility to SBI Insta Cash Fund. However, as part of the SEBI classification exercise, the Insta Cash Fund got classified as an ultra-short duration fund and Savings Fund as a Money Market Fund.

As per SEBI rules, only liquid funds are eligible for this type of facility. This has made SBI MF once again change the fund under which the facility is offered to SBI Liquid Fund. The fund house has also reduced the minimum investment amount in this fund from Rs 50,000 to Rs 5,000. These changes went into effect on 16th May 2018.

Other mutual funds also offer this facility

HDFC MF has introduced it for HDFC Liquid Fund, and DSP Blackrock MF has introduced it for DSP Blackrock Liquidity Fund and ICICI Prudential MF has introduced it for the iPru-iSave MF. Reliance Mutual Fund offers a debit card connected to Reliance Money Manager Fund in association with HDFC Bank and Visa.

Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at