What does ‘switch’ mean in mutual funds, and how can I use it on FYERS?

What Does ‘Switch’ Mean in Mutual Funds, and How Can I Use It on FYERS?

In mutual funds, a switch is the process of moving your investment from one scheme to another within the same mutual fund house (AMC). It allows you to realign your portfolio—such as switching from debt to equity—without the need to manually redeem and reinvest funds.

The switch transaction is handled internally by the AMC. New units are allotted in the target scheme based on the applicable NAV, and the original units are redeemed accordingly.

Key Points About Switching in Mutual Funds

  • Switch is allowed only between schemes under the same AMC
  • Treated as a redemption and fresh investment for taxation purposes
  • Exit load, entry load, and minimum amount conditions may apply
  • Switching may attract a switching fee, though most AMCs waive this
  • Cut-off timings affect which day's NAV is applied for both redemption and investment

Note: FYERS currently does not support direct switch transactions on the platform. You’ll need to redeem your units and reinvest manually, or initiate a switch from the AMC’s portal using your folio number.

Always evaluate exit load, capital gains tax, and the investment minimum of the target scheme before initiating a switch. When using FYERS, treat switch as two steps: redeem and reinvest.

What If...

ScenarioExplanation
You want to rebalance your portfolioSwitching helps move funds across schemes within the same AMC, aligned to your goals.
You’re unsure about the tax impactSwitches are taxable—capital gains rules apply based on your holding period.
You initiate a switch close to the cut-offNAV of redemption and target scheme may differ depending on timing.
You want to switch between AMCsNot permitted. You must redeem from one AMC and invest afresh in the new one.

Last updated: 15 Sep 2025

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