NAV Cut-off & Applicability
Which day's NAV you get depends on when your money actually reaches the fund — a rule that quietly matters for large lumpsums.
Why you care
You don't get the NAV of the moment you hit "invest". You get the NAV of the day your money is actually received by the fund. For most schemes there's a 3:00 PM cut-off. And — this is the part people miss — since 2021 the applicable NAV for a purchase depends on when the funds are realised, not merely when you placed the order.
Run the numbers
Send a large lumpsum at 2:55 PM but the bank credit reaches the AMC only next morning: you get tomorrow's NAV, not today's (illustrative). On a volatile day that one-day shift can move your entry price a percent or more. For a ₹500 SIP the effect is trivial; for a ₹20 lakh lumpsum it isn't.
Where this goes
This mostly matters when you decide lumpsum vs SIP: a big one-shot entry is exposed to which day's NAV it lands on, while a monthly SIP averages that noise away by design. Knowing the realisation rule is really about not being surprised by your entry price.
Why you care
NAV cut-off and applicability is the rulebook for which day's price your money buys units at. It sounds like plumbing, and for a small SIP it basically is. For a large lumpsum it can quietly change your entry price.
Two facts do the work. First, cut-off times: for most equity and debt schemes the cut-off is 3:00 PM. For liquid and overnight funds it's earlier, around 1:30 PM (illustrative — confirm current times against the SEBI Master Circular). Second, and more important since 2021: for a purchase, the applicable NAV depends on when the fund's money is actually realised — i.e. credited to the AMC. It's not simply about when you placed the order. Earlier this "realisation" test applied only to amounts above ₹2 lakh; the rule was widened so that it applies to purchases generally (flag to verify against the SEBI circular). So an order placed before cut-off can still get the next day's NAV if the money lands after cut-off.
Run the numbers
You place a ₹20 lakh lumpsum order at 2:55 PM (illustrative). Two ways it can go:
- The funds are realised by the AMC before the 3:00 PM cut-off → you get today's NAV.
- The transfer clears only the next morning → you get tomorrow's NAV, even though you "ordered" today.
On a calm day, one day's difference is noise. On a day the market gaps up 1.5%, that one-day slip means you buy in at a NAV 1.5% higher, and the difference on ₹20 lakh is ₹30,000. The same slip on a ₹500 SIP instalment is a rounding error. This is why the rule is a lumpsum concern, not a SIP concern.
Where this goes
Cut-off timing connects to two things. It decides which day's NAV you transact at. It's also a real input to the lumpsum vs SIP decision. A lumpsum concentrates all its money on one day's price and is therefore exposed to this timing, while a SIP spreads entries across many days and averages the effect out. For most investors the takeaway is simply to fund large purchases early, so realisation isn't left to chance.