Mutual fund orders are filled once per business day, at the net asset value calculated after the major U.S. stock exchanges close at 4:00 PM Eastern Time. Every investor whose order arrives before that cut-off gets the same per-share price for that day. Orders that arrive after 4:00 PM roll to the next business day and are filled at that day’s closing price instead. This is called forward pricing, and it is required by federal rule, not a convention funds choose.1eCFR. 17 CFR 270.22c-1 – Pricing of Redeemable Securities for Distribution, Redemption and Repurchase
Why Mutual Funds Only Price Once a Day
The price you pay or receive is the fund’s net asset value, or NAV. It is the fund’s total holdings (stocks, bonds, cash, and other assets) minus any debts, divided by the number of shares outstanding. Because NAV depends on the closing prices of everything the fund owns, it cannot be calculated until after the market closes.
Rule 22c-1 under the Investment Company Act of 1940 requires funds to sell and redeem shares at the next NAV computed after the order is received. Place an order at 2:00 PM and you do not get the previous day’s close, and you do not get an intraday estimate. You get the NAV struck once the 4:00 PM closing bell rings and the portfolio is repriced. The rule exists so that no one can act on a price that has already been set while other investors are still trading blind.1eCFR. 17 CFR 270.22c-1 – Pricing of Redeemable Securities for Distribution, Redemption and Repurchase
The 4 PM ET Cut-Off
To receive today’s NAV, your order has to reach the fund before its cut-off. For the vast majority of mutual funds, that deadline is 4:00 PM Eastern, when the New York Stock Exchange closes. An order submitted at 3:59 PM gets today’s price. An order submitted at 4:01 PM gets tomorrow’s.
The line is enforced strictly because crossing it is illegal. The SEC treats “late trading,” meaning an order placed after NAV has been determined but filled at that already-known price, as a form of fraud against the other shareholders in the fund.2SEC. Late Trading
Your Broker’s Cut-Off Is Often Earlier
Many brokerage firms set internal deadlines before 4:00 PM, sometimes 3:00 or 3:30 PM Eastern. The brokerage needs time to batch customer orders and transmit them to the fund company before the regulatory hard stop. If you trade through a broker rather than directly with the fund, check that firm’s specific cut-off. Assuming you have until exactly 4:00 PM when your broker cut you off at 3:30 PM is how an order you thought would price today ends up pricing tomorrow instead.
Canceling Before the Cut-Off
If you change your mind, you can usually cancel while the order is still pending. Most brokerages and fund companies let you cancel through their website or app as long as the dealing deadline has not passed. Once the window closes and the fund processes the order at the day’s NAV, the transaction is final.
Weekend, Holiday, and After-Hours Orders
Orders placed on a Saturday, Sunday, or market holiday sit in a queue. No NAV is calculated on days when the exchanges are closed, so there is no price to assign. Those orders are grouped with everything received before the cut-off on the next regular business day and filled at that day’s closing NAV.3Fidelity Investments. Trading FAQs: Placing Orders
The same logic applies to orders placed after 4:00 PM on a Friday. The order will not receive Friday’s NAV, which has already been set, and Saturday has no NAV at all. It gets Monday’s closing price, assuming Monday is not itself a holiday. During a long weekend like Thanksgiving, an order placed Wednesday evening might not be priced until the following Monday.
Automatic recurring investments follow the same rules. If a scheduled purchase date falls on a weekend or holiday, the purchase typically executes on the next available trading day, so your actual purchase dates will not always match the calendar you set up.
Settlement: When Shares and Cash Actually Move
Getting your price locked in at the day’s NAV is not the same as completing the transaction. After the order is filled, it enters a settlement phase, when shares and cash physically transfer between accounts. Most mutual fund transactions follow a T+1 settlement cycle, meaning the trade officially settles one business day after it is executed.4SEC. Shortening the Securities Transaction Settlement Cycle
For buyers, shares appear as settled holdings the next business day. For sellers, redemption proceeds become available for withdrawal or reinvestment on that same timeline. Sell on a Thursday, and the cash settles Friday. A Friday sale settles Monday. If you need the money by a specific date, build in that extra day, because unsettled funds generally cannot be withdrawn from the account.
The Seven-Day Ceiling on Redemptions
Federal law caps how long a fund can take to pay a redemption. Section 22(e) of the Investment Company Act prohibits any registered investment company from postponing payment on a redemption request for more than seven days after the shares are tendered.5Office of the Law Revision Counsel. 15 USC 80a-22 – Distribution, Redemption, and Repurchase of Securities
Most funds pay much faster than that, but the statute is a backstop. A fund can exceed the deadline in only three situations:
- The New York Stock Exchange is closed for reasons other than regular weekends and holidays.
- Market conditions make it impractical for the fund to sell its holdings or calculate NAV accurately.
- The SEC issues a specific order permitting the suspension to protect shareholders.
These exceptions are genuinely rare. Under normal conditions, if a fund is taking longer than a few business days to pay a redemption, something is wrong. The seven-day rule applies regardless of the fund’s size or the amount being redeemed.
Money Market Funds Can Price Multiple Times a Day
Standard mutual funds calculate NAV once a day. Institutional money market funds are the exception. These funds may strike NAV multiple times per day, sometimes at 9:00 AM, noon, and 3:00 PM, to give institutional investors intraday liquidity and same-day settlement.6Federal Register. Money Market Fund Reforms
Institutional prime and institutional tax-exempt money market funds also use a floating NAV rounded to the fourth decimal place, rather than the stable $1.00 share price that retail money market funds maintain. Each pricing window has its own order cut-off, and forward pricing applies separately to each period. If you hold a retail money market fund through an ordinary brokerage account, you follow the normal once-a-day schedule. The multiple-strike structure is primarily relevant to large institutional cash management.