Sundaram MF announces instant redemption facility launch
Sundaram Mutual Fund has reported the launch of instant redemption facility in its open-ended liquid fund, Sundaram Money Fund. This amenity will enable investors to redeem up to Rs 50,000 per day right away.
Managing Director of Sundaram Mutual, Sunil Subramaniam, while commenting on the new development, added, “One disadvantage that liquid funds carry is the time lag of a few days between putting in a redemption request with the mutual fund and getting the money in your bank account. The introduction of the ‘Instant Redemption Facility’ addresses this very issue and allows you to instantaneously access up to Rs 50,000 per day.”
Usually, people tend to keep their funds in either a savings or a current account, based on their occupation and requirements. Generally, savings accounts give a 3.5 per cent rate of interest unless the balance is over Rs 1 lakh while current accounts, on the other hand, do not pay any interest at all. Therefore, in such cases, investing in liquid funds is preferable and helps to earn better returns than parking funds in banks does.
Two major reasons for selecting to deposit money into a savings bank account are safety of capital and liquidity. Though liquid funds can provide safety of capital to some extent, they cannot offer liquidity similar to that of a bank account.
Recent changes introduced by Securities and Exchange Board of India (SEBI) require liquid funds to maintain a lock-in period of seven days. However, introduction of the instant redemption facility with Sundaram Money Fund necessitates no lock-in period and no minimum balance requirements.
Sundaram Money Fund is managed by Chief Investment Officer (CIO) - Fixed Income, Dwijendra Srivastava and Senior Fund Manager - Fixed Income, Siddharth Chaudhary. The efficacy of this scheme is benchmarked against CRISIL Liquid Fund TRI.
Speaking further about the newly added facility, enumerating its benefits, Sunil Subramaniam said “For salaried persons arranging to credit your salary into your liquid fund, ensures that all your surplus monies gets this advantage and facilitates switching into equity mutual funds with the same fund house with a simple switch or STP request without going through the formalities of registered a bank mandate etc."
This facility is applicable for transactions done through the Sundaram Mutual website. Sundaram Mutual claims that after having placed a valid request, in a few minutes time, the investor’s registered bank account shall get credited with the redemptions via IMPS mode of transfer.