How does my money reach the Mutual Funds?


Another question that we get from a lot of our users is how exactly money is transferred between their bank account and the Mutual Fund, and what are the timelines involved.

Someone initiated an investment on Goalwise on a Thursday evening, but their account was debited only on Monday. Some users submitted redemption requests on a Monday morning, and saw their accounts credited as early as 10AM on Tuesday.

In the spirit of transparency, we thought it would be useful to spell out the entire process in detail, so that you know exactly what to expect and when.

Let's begin with a table that summarizes the timelines involved, and then move on te details of the process.

 

INVESTMENT THROUGH NET BANKING

Time of Transaction

Account Debit Date

NAV Date

Goalwise Dashboard Update

Confirmation from the Mutual Fund

Before 1PM on a business day ^

Same day

Same day

Next business day

Within 5 business days after NAV Date

Non-business day or after 1PM on a business day ^

Same day

Next business day

Up to 2 business days

Within 5 business days after NAV Date

INVESTMENT THROUGH NACH MANDATE

Before 1PM on a business day ^

Next business day

Up to 2 business days*

Up to 3 business days

Within 5 business days after NAV Date

Non-business day or after 1PM on a business day ^

Up to 2 business days

Up to 3 business days*

Up to 4 business days

Within 5 business days after NAV Date

Monthly SIP

Scheduled SIP Date, or next business day (if SIP Date is a non-business day)

Up to 2 business days after SIP Date*

Up to 2 business days

Within 5 business days after NAV Date

*      For investment amounts smaller than Rs. 2 Lakh, the NAV Date is usually the same as the Account Debit Date. For investments greater than Rs. 2 Lakh, Mutual Fund companies may take an extra business day to process the transaction.

^      For liquid fund investments, the cutoff time is 12PM.

REDEMPTION

Time of Transaction

NAV Date

Goalwise Dashboard Update

Account Credit Date

Confirmation from the Mutual Fund

Before 1PM on a business day ^

Same day

Next business day

Debt MFs - 1-2 business days

 

Equity MFs - 3-5 business days

Within 5 business days after NAV Date

Non-business day or after 1PM on a business day ^

Next business day

Up to 2 business days

Within 5 business days after NAV Date

^      For liquid fund investments, the cutoff time is 12PM.

 

Let's discuss the process in greater depth.

1. At the time of investment:

You can invest through two different modes of payment on Goalwise - Net Banking and NACH Mandate. When you execute transactions through these modes, your money reaches the Mutual Funds with slightly different timelines. Note, however, that irrespective of how you choose to transact, it is always safe to do so, primarily because the money is never held in Goalwise’s bank accounts, as we explained earlier in this blog.

a. Net Banking - This option is only available for one-time (lumpsum) investments. When you choose the Net Banking option and click on the Invest Now button, you will be redirected to your bank’s net-banking portal, via an RBI-approved payment gateway appointed by Goalwise. Here, you can securely login to your bank’s Net Banking portal and make the payment, just like any other e-commerce transaction.

The goal you are investing towards may have multiple recommended funds. But when you make the investment, you will see a single debit from your account for the total amount you are investing, rather than separate debits for each Mutual Fund.

The money will be debited from your account as soon as you pay through net banking, and you will receive an alert from your bank if you have SMS/email alerts set up. You will see the debit transaction listed in your bank statement as a debit to the payment gateway (and not to the Mutual Funds). The payment gateway then disaggregates the total and transfers the money to each separate Mutual Fund.

The actual allotment of Mutual Fund units happens either on the same day (if the payment was made before a certain cut-off time, which is usually 1PM, on a business day) or on the next business day (if the payment is made after the cut-off time, or on a non-business day).

Once the Mutual Fund company has executed your investment (i.e. you have been allotted Mutual Fund units), it will communicate the transaction confirmation to Goalwise on the next business day. We will update the investment on your Goalwise dashboard on the same day that the Mutual Fund company sends us the transaction confirmation.

Each individual Mutual Fund will then send you a transaction confirmation, via email and/or SMS, with details of Investment Amount, Units Purchased, and the corresponding Net Asset Value (NAV) within 5 business days after executing the transaction.

b. NACH Mandate - An NACH mandate is a form that authorizes Goalwise to request your bank to debit your account on your behalf for the transaction amount requested by you. This mandate is necessary if you want to setup a Systematic Investment Plan (SIP). It works similarly to the authorization you give a bank to auto-debit monthly EMIs from your account for, say, a home loan repayment.

When you invest through an NACH mandate (whether lumpsum or for monthly SIP), Goalwise, through its RBI-approved payment processor, sends a debit request to your bank. Again, even if there are multiple Mutual Fund investments, there is a single, consolidated debit from your bank account.

For one-time payments, the debit request is sent to your bank either on the day you initiate the transaction (if you submit the request before a certain cut-off time, usually 1PM, on a business day) or on the following business day (if you submit the request after the cut-off time, or on a non-business day).

Your account will be debited on the business day after the request is sent to your bank. Mutual Fund units will be allotted according to the NAV for the day that the Mutual Fund processes your investment. This is usually the same as the day that money is debited from your account. However, if your investment amount is greater than Rs. 2 Lakh, the allotment of Mutual Fund units may take an additional business day.

Monthly SIPs work slightly differently. To execute the SIP on the scheduled date, Goalwise sends a debit request to your bank one business day before the scheduled date of your SIP.

For example, if you have setup your SIP investments to execute on the 7th of every month, Goalwise will forward the debit request to your bank on the 6th (assuming the 6th is a business day), so that your account gets debited on the 7th. You will be allotted Mutual Fund units as per the NAV on the 7th. If the 7th is not a business day, then the debit and the allotment of units will happen on the next business day. As in the case of one-time investments through NACH, allotment of Mutual Fund units (and the corresponding NAV) may take an extra business day if your investment amount is greater than Rs. 2 Lakh.

In this case as well, the money goes via the payment processor, which then splits the aggregate amount and directly transfers it to each individual Mutual Fund.

Similar to Net Banking investments, once the Mutual Fund company has executed your investment (i.e. you have been allotted Mutual Fund units), it will communicate the transaction confirmation to Goalwise on the next business day. We will update the investment on your Goalwise dashboard on the same day that the Mutual Fund company sends us the transaction confirmation.

Each individual Mutual Fund will also directly send you a transaction confirmation, via email, with details of Investment Amount, Units Purchased, and the corresponding Net Asset Value (NAV) within 5 business days after executing the transaction.

Each transaction you execute on Goalwise through the NACH payment mode will reflect in your bank account against the name ‘ACH/TP ACH ALPHAFRONT’. Alphafront Finserv Pvt Ltd is our registered company name, and Goalwise is our brand name. This does not mean that your money is being transferred to Alphafront/Goalwise. It means that the ‘ACH’ (Automated Clearing House) debit is being made from your account through the NACH mandate you submitted via Alphafront/Goalwise.

2. At the time of redemption/withdrawal:

Whenever you initiate a request to redeem (withdraw) your investments with a Mutual Fund through Goalwise, the Mutual Fund transfers the money directly into your bank account currently listed with Goalwise. If you change your bank account in your Goalwise account, we communicate this change to the Mutual Fund on your behalf. Any future withdrawals will be received in the updated account .

Once you initiate the redemption request, the credit will be received in your account in 1-5 business days, based on the time of day you submitted the transaction, and the type of Mutual Fund (Equity or Debt).

If the redemption is initiated before a certain cut-off (usually 1PM) on a business day, the Mutual Fund will process your request on the same day. If the redemption is initiated after the cut-off, your request will be processed by the Mutual Fund company on the next business day.

The NAV assigned to this transaction would be the NAV of the date that your redemption request is processed by the Mutual Fund Company. Once your redemption request is processed by the Mutual Fund, they will initiate the transfer of funds to your account.

For example, if you initiate a redemption at 4PM on Monday, August 8, 2016, it will be processed by the Mutual Fund on Tuesday, August 9, 2016 (since it is after the cut-off time). Correspondingly, your Mutual Fund units will be redeemed as per the NAV on August 9.

As mentioned earlier, depending on the type of Mutual Fund, your money will be credited to your account 1-5 business days after the redemption request is processed by the Mutual Fund. For debt Mutual Funds, this time period is usually 1-2 business days, while in the case of equity Mutual Funds, it takes between 3-5 business days.

All redemption transactions will reflect in your bank statement as a credit from the respective Mutual Fund.

Once the Mutual Fund company has processed your redemption request, it will communicate the transaction confirmation to Goalwise on the next business day. We will update the redemption on your Goalwise dashboard on the same day that the Mutual Fund company sends us the transaction confirmation.

Each individual Mutual Fund will also directly send you a transaction confirmation, via email and/or SMS, with details of Investment Amount, Units Purchased, and the corresponding Net Asset Value (NAV) within 5 business days after executing the transaction.

We hope you were able to follow all the steps in the chain. It’s long and excruciatingly detailed, but we think it’s important to communicate the nitty-gritties to you!

If you have any additional questions, we are always just a phone call (+91-8586000247) or an email (contact@goalwise.com) away!