Starting next month, mutual funds will deposit the redemption amount from equity schemes in investors’ bank accounts within three days of the transaction. The Association of Mutual Funds in India (Amfi) announced on Friday that the industry will move to a T+2 settlement cycle for equity schemes from February 1.

“From today, the Indian equity markets move to T+1 settlement cycle for all stocks, shortening the settlement cycle by a day… To pass on this benefit to mutual fund investors, it has been decided all asset management companies (AMCs) will move to T+2 redemption payment cycle for equity schemes, and implement this uniformly with effect from February 1, 2023,” Amfi said in a press release.

T+2 means the day of the trade and the next two business sessions. This means that if an investor sells MF units on Monday, the money will get deposited in his/her bank account by Wednesday.