Mutual Funds t-plus-1-t-plus-2-settlement

T+1 / T+2 settlement in mutual funds

From WebNotes, a public knowledge base. Last updated 19 May 2026. Reading time ~4 min.

T+1 / T+2 settlement refers to the timeline between transaction date (T) and money/units settlement in Indian mutual funds. SEBI’s reforms over 2021 to 2024 shortened settlement timelines: equity MF redemption moved from T+3 to T+2, and subsequently to T+1 for select categories, aligning Indian MF operations with the broader securities-market settlement reform.

Settlement framework

Redemption settlement

Liquid funds: T+1 (since long-standing rule).
Equity / hybrid MFs: T+2 (reduced from T+3 in 2022-2023).
Debt MFs: Per category, typically T+1 to T+3.

Subscription unit allotment

Liquid funds: Same-day or next-day units per applicable NAV / cut-off rule .
Equity / debt: T+1 unit allotment.

Cut-off compliance

Per NAV cut-off reform (Feb 2021) , for amounts above Rs 2 lakh, money-realisation by cut-off is required for same-day NAV.

Investor implications

Liquid fund redemption: cash in account next morning.
Equity redemption: T+2 means cash in 2 working days.
Plan large-spend redemptions accordingly.

External references

References

SEBI (Mutual Funds) Regulations 1996.
AMFI Best Practice Guidelines.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 19 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.