How Open-ended fund works
It does not have a fixed number of units because the scheme creates units when money enters and cancels units when investors redeem. Cut-off rules, settlement time, exit load and exceptional restrictions can still affect access to money.
A rupee example
A ₹50,000 purchase adds units at the applicable NAV, while a later redemption removes the selected units and pays their value after applicable charges and settlement.
The example isolates one idea so the arithmetic is visible. Real outcomes can include taxes, fees, cash-flow timing and market movement that the simplified example does not model.
Why it matters for your family
Open-ended does not mean risk-free or instantly available. Families should align the scheme's settlement, volatility and exit-load period with when the money may be needed.
Questions people ask
- What does Open-ended fund mean?
- An open-ended fund normally allows investors to purchase and redeem units from the scheme on business days at the applicable NAV.
- Why does Open-ended fund matter for a family?
- Open-ended does not mean risk-free or instantly available. Families should align the scheme's settlement, volatility and exit-load period with when the money may be needed.
- Where can I verify information about Open-ended fund?
- Start with SEBI Investor, linked on this page, and the current official document for the product or tax year involved.