Sundaram Mutual has introduced instant redemption facility in its existing open-ended liquid scheme, Sundaram Money Fund, without additional cost.
The facility will allow investors to redeem upto ₹50,000 per day or 90 per cent of their portfolio value per day, across folios under their PAN instantly anytime through the week. It is available for transactions made through the Sundaram Mutual website starting Monday.
Redemptions will be credited to investors’ registered account through IMPS. The instant redemption is currently available only for resident individuals in the Growth Plan (Regular and Direct) of Sundaram Money Fund.
If units are redeemed or switched out within a day of allotment, the exit load will be 0.007 per cent and it reduces by 0.0005 per cent from day 2 to 6. From the seventh day, there will be no exit load.
Sundaram Money Fund has no lock-in and no minimum balance requirement for availing this facility.
Sunil Subramaniam, Managing Director, Sundaram Mutual, said people use savings and current accounts to park a significant amount of money for urgent and unplanned expenses, owing to the ease of access the accounts provides.
But these accounts give zero or very low interest rates and most often, this money remain unused for long, he said.
On the other hand, he added, liquid funds can deliver potentially higher returns due to the advantage of ‘disintermediation’ and ‘taxation as capital gains’. The only disadvantage with liquid funds was the time lag between request for redemption and receiving the money in bank account. The introduction of the instant redemption facility addresses this issue, he added.