Instant withdrawals from mutual funds have crossed Rs 2,100 crore since the facility was introduced, highlighting growing investor preference for quick liquidity access, according to an analysis by Zerodha Fund House.
Data sourced from Computer Age Management Services (CAMS) shows that the Instant Access Facility (IAF) processed more than 2.3 million transactions amounting to Rs 2,112 crore between FY2016-17 and December 2025 across mutual funds serviced by CAMS.
The analysis reveals three key trends: a rising number of investors using instant redemptions, strong usage outside regular market hours, and a clear preference for small-ticket withdrawals.
Number of investors using instant withdrawals more than doubles
The number of unique investors using the instant redemption facility has more than doubled over the past five years. It increased from 2.55 lakh investors in FY2020-21 to over 5.84 lakh investors by late 2025.
The data suggests that investors who try instant withdrawals tend to use the facility multiple times during a year to manage short-term liquidity needs.
According to the analysis, more than 80% of investors used the facility between one and five times in a financial year, indicating periodic usage rather than frequent withdrawals.
Significant withdrawals during weekends and after market hours
Instant redemption activity is not limited to business hours. The data shows that over 5.04 lakh transactions — about 22% of the total — were initiated during weekends or non-business days, resulting in withdrawals of nearly Rs 359 crore.
Unlike regular mutual fund redemptions that typically take two to three business days, the instant redemption facility allows investors to receive funds within minutes.
Under regulations set by the Securities and Exchange Board of India, investors can withdraw up to Rs 50,000 per day or 90% of their current investment value, whichever is lower, through the instant redemption route.
Small withdrawals dominate investor usage
The analysis also shows that investors mostly use the facility for small withdrawals.
Nearly 68% of all transactions were for amounts of Rs 5,000 or less, even though the average redemption amount stood at Rs 9,154.
This indicates that investors primarily use instant redemptions for micro-liquidity needs, withdrawing small sums while keeping the majority of their investments intact.
Zerodha enables 24×7 instant withdrawals for overnight fund
Separately, Zerodha Fund House said it has enabled 24×7 instant withdrawal for investors in its overnight fund through its WhatsApp channel.
The facility allows resident individual investors holding units in non-demat mode to redeem funds instantly, including during weekends and bank holidays, within the regulatory limit of Rs 50,000 or 90% of investment value per day.
Vishal Jain, CEO of Zerodha Fund House, said faster access to funds enhances the practicality of savings products and improves liquidity management for investors.
“You realise the true value of your savings in how quickly you can use them when you need them most. We believe that accessing your money should be a seamless part of daily life,” he said.