ASBA (Application Supported by Blocked Amount) offers several advantages over the traditional cheque-based application process, particularly in terms of convenience, efficiency, and financial benefits.
Financial benefits
- Interest earnings: The blocked amount in your bank account continues to earn interest until the shares or units are allotted, unlike cheque payments where funds are immediately debited. This ensures your money remains productive during the application period.
- No upfront payment: You don’t need to issue a cheque or demand draft for the application amount. Funds are blocked directly in your bank account, saving time and avoiding any banking or processing charges.
- Average Quarterly Balance (AQB) benefit: The blocked amount is still considered for AQB calculation, helping you maintain minimum balance requirements in your account.
In short, ASBA provides a smoother, faster, and more efficient way to apply for IPOs and mutual fund NFOs without parting with your funds until allotment.
Need help with your Mutual Fund investments?
Get simple, transparent guidance on your portfolio — no obligation, no sales pitch.
📞 Book a Free Call