NAV is the first number most investors look at and the one most often misread. This guide explains what it measures, which day’s NAV applies to your transaction, and the conclusions it cannot support.
Key points
- NAV (Net Asset Value) is the value of one unit of a scheme on a given day.
- You buy and sell units at the NAV that applies to your transaction, not at a price you choose.
- A NAV of ₹15 is not cheaper than a NAV of ₹150. What matters is how the value changes after you invest.
- NAV already has the scheme’s running costs taken out.
- NAV says nothing about risk or suitability.
What NAV is
A scheme holds shares, bonds or other securities. Add up their market value, take away what the scheme owes, and divide by the number of units held by all investors. The result is the NAV per unit.
AMFI gives a simple example on its website: if the securities of a scheme are worth ₹200 lakh and investors hold 10 lakh units, the NAV is ₹20 per unit.
Because market prices change every day, NAV changes every day. It is declared after the markets close and published on the fund house’s website and on AMFI’s website.
Which day’s NAV you get
A share has a live price through the day. A mutual fund unit does not. Your purchase or redemption is carried out at one NAV for the day, and which day that is depends on timing.
For a purchase, two things must both happen before the cut-off time: the fund house must have your request, and your money must have reached the scheme’s bank account. SEBI’s Master Circular for Mutual Funds (as on 20 March 2026) sets the cut-off for credit of funds at 3:00 pm for schemes other than liquid and overnight schemes, and says a day’s NAV is assigned only if both the application and the funds are in before the cut-off. Liquid and overnight schemes follow different timings.
This is why a payment that leaves your bank on one day can be allotted units at the next business day’s NAV. The date of your instruction does not decide it. The date the money becomes available to the scheme does. For a SIP, see how a SIP instalment works.
Cut-off rules can be revised. Check the scheme documents or ask before a transaction where one day’s difference matters to you.
A low NAV is not a bargain
Suppose you invest ₹10,000 in each of two schemes that hold exactly the same securities. This is a hypothetical illustration, not a forecast.
| Scheme A | Scheme B | |
|---|---|---|
| NAV on the day you invest | ₹20 | ₹200 |
| Units you receive | 500 | 50 |
| Holdings rise 10% in value: new NAV | ₹22 | ₹220 |
| Value of your investment | ₹11,000 | ₹11,000 |
You hold more units of Scheme A, but each unit is worth less. The result is identical. A scheme usually has a higher NAV because it has existed longer or its holdings have risen over time, not because it is overpriced.
For the same reason, a new fund offer at ₹10 a unit is not cheaper than an existing scheme at ₹100.
What NAV already includes
A scheme’s running expenses are deducted from its assets a little every day, so the NAV you see is after costs. This is also why the regular plan and the direct plan of the same scheme show different NAVs: the portfolio is the same, the cost is not.
If you redeem within the exit load period, the load is deducted from the NAV to arrive at your redemption price. Check the load before you invest money you may need soon.
In the IDCW option, the NAV falls by the amount paid out, and any statutory levy, each time a payout is made. The fall is not a loss in the scheme. It is your own money moving from the scheme to your bank account.
What NAV does not tell you
- Whether the scheme is expensive. Covered above.
- How risky it is. Two schemes with the same NAV can hold very different things. The riskometer and the scheme documents describe the risk.
- What it will do next. A NAV history is a record. It is not an indication of future returns.
- Whether it suits you. That depends on your goal, your horizon and how you would cope with a fall.
Comparing the NAVs of two different schemes tells you nothing. Comparing the change in one scheme’s NAV over time tells you how that scheme’s unit value moved, before any exit load and tax that apply to you.
Risk note
NAV can fall as well as rise, and you may get back less than you invested.
Frequently asked questions
Is it better to buy when the NAV is low?
A lower NAV than last month usually means the scheme’s holdings have fallen in value (in the IDCW option it can also follow a payout). Whether that is a good time to invest depends on what happens next, which nobody can know. A SIP spreads purchases across many NAVs so that no single day decides the outcome.
Why did I get a different NAV from the one I saw when I paid?
Units are allotted at the NAV of the business day on which your request and your money both reached the scheme before the cut-off time. That NAV is declared only after the market closes, so you cannot see it at the moment you pay.
Why is the direct plan NAV higher than the regular plan NAV of the same scheme?
The direct plan has a lower expense ratio because it carries no distributor commission. Lower daily deductions leave a slightly higher NAV, and the gap widens with time. I Tag Financials distributes regular plans and earns commission on them.
Where can I check the NAV of a scheme?
On the fund house’s website and on the AMFI website. AMFI states that the NAVs of schemes are published daily on both.