A Switch order combines the Sale of units in one scheme and Purchase of units in another scheme within the same AMC. So say if you want to Sell units of Scheme of A and Buy units of Scheme B within the same AMC, you can do one of the following:
- Placing a Sale order in Scheme A, receive funds in your bank account and then place a Purchase order in Scheme B and then transfer funds for it.
- Place a Switch order from Scheme A to Scheme B. The AMC will in its own records recognize that units of Scheme A are sold and units of Scheme B are purchased. The funds are re-allocated from Scheme A to Scheme B within the AMC's records itself. This is more efficient and faster as it removes the need for movement of funds to and from your bank.
Importantly, you should consider exit load, lock-in and tax implication while placing any Switch Order.
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