Investor Corner/Money matters beyond investing/Practical & Operational
4.1.4 Cut-off Timings
Cut-off timing is the deadline by which a purchase or redemption request must be submitted to receive that same business day's NAV. Miss it, and the request is processed at the next business day's NAV instead.
Why a specific cut-off time exists
A fund needs to know exactly how much money is coming in or going out before it can finalise that day's NAV calculation. The cut-off time draws a clear line: requests received before it are included in that day's processing and pricing; requests received after it roll over to be processed at the next business day's NAV.
Typical cut-off times, and why they vary by category
Equity funds commonly have a cut-off around 3 pm, while liquid and overnight funds often have an earlier cut-off, sometimes as early as 1:30 pm, reflecting their same-day settlement needs. These specific times can vary by AMC and by transaction type, so checking the exact cut-off for the particular fund and transaction being made is generally worthwhile before relying on it.
Why this matters more than it might seem
Missing a cut-off by even a few minutes on a day when the market moves sharply can mean receiving a meaningfully different NAV than intended, particularly for large transactions or liquid funds where investors are managing cash flow around a specific date. Building in a buffer before the actual deadline, rather than submitting right at the wire, avoids this risk entirely.
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