The Best Time To     Withdraw From Your Mutual Fund

Don’t Act In Haste When It Comes To Your MFs

Never act impulsively and withdraw your MF investment every time you see a gain or a loss. The longer your money stays invested in MFs, the better your prospects for returns. Here’s a guide on when you should withdraw.

For Emergencies

Protect your long and short-term investments from taking a hit by setting aside an emergency fund with a substantial amount. But if you don’t have such an emergency fund and really need money for something unexpected, tap into your MF investments.

Planned Expenditure

If you are investing in a holiday or buying a car, take out the money as and when you reach your savings goal. Even for such expenses, it is not recommended to withdraw the invested amount earlier than needed.

Long-Term Goals

If you have been saving for your child’s education for 15 years, and she’s likely to hit college in the next 5, it makes sense to shift your funds from long-term (equity funds) to short-term (debt funds) to protect your wealth from market volatility.


If funds are underperforming due to short-term fluctuations, withdrawing may not be wise. But, if the fund has been consistently underperforming over 2-3 years, withdraw your money and invest in a better fund.

Consider Tax

When you withdraw an MF investment, the gain will be reduced because you will have to pay tax on it. Always consider the impact of exit load and capital gain taxes.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.