Mutual funds have gained unprecedented popularity in the past few years not only because they are easy to invest in but redeeming or selling your investment is equally easy. This helps infuse confidence among an investor that he/she can avail of the returns as well as the capital invested whenever the need arises. 
However, there are a few aspects you must consider before you redeem your investment:
1. Exit load: While open funds do not come with any lock-in period, but it would attract an exit load if redeemed within a specific time frame. While the exit load varies from one mutual fund house to another, an investor must be well aware of the penalty he/she will have to pay if selling his/her investment before a stipulated time. 
2. Type of fund: An equity-linked saving scheme, or ELSS as its popularly known, has an inherent lock-in period of three years. Thus, you cannot redeem an ELSS fund before the mandatory three years. The same rule applies in ELSS SIP, wherein the three-year period starts from the date of every individual SIP installment. Hence, you should be aware of the scheme you have invested in. If you have parked your money in a close-ended fund, then you can redeem your investment only at the expiry of the term or the maturity date. 
3. Tax implication: Various funds attract various tax liabilities:
- In equity funds, if the units that have been redeemed have a holding tenure less than one year, then the investor will have to pay short-term capital gains (STCG) tax. 
- If equity fund units with a holding tenure of over a year are redeemed, then capital gains tax will be applicable on gains over Rs. 100,000.
- In case of a debt mutual fund, the short-term capital gains tenure is three years and the tax applicable will be as per the investor’s tax slab. 
- However, units held for over three years qualify for long-term capital gains tax, with indexation benefits.
4. Pay-out time: If you need your funds immediately, say in the next few hours or within a day, then it makes no sense to redeem your mutual fund investment as the process of redemption usually takes 2-4 business days for the amount to get credited in your account. The exception to this rule is liquid funds, which can be redeemed within a day’s time.