What is the meaning of face value?

The face value is the value assigned to each unit of mutual fund during its New Fund Offer For example, if the face value of a mutual fund is Rs. 10, it means that every unit of that mutual fund scheme has a value Rs. 10.

What is the difference between face value and Net Asset Value (NAV)

While face value remains fixed and is applicable during the New Fund Offer (NFO), the Net asset Value (NAV) keeps changing. It can be higher or lower than the face value based on the scheme’s performance. For instance, a mutual fund scheme with a face value of Rs. 10 may be having a NAV of Rs. 15 in a bull market if the scheme is doing well. But in case of losses, its NAV can fall below the face value. Nevertheless, the face value will always say Rs. 10 per unit.

Face value definition in currency notes

In India, currency notes issued by the Reserve Bank of India have a denominated face value printed on them. For example, a Rs. 10 note says 'ten rupees' on it, while a Rs. 500 note says 'five hundred rupees'. The holder of these notes can redeem them for goods and services of equivalent face value from the RBI or banks. For instance, a person can buy goods worth Rs. 100 by handing over a Rs. 100 banknotes to the shopkeeper. Even if inflation increases costs over the years, the face value of currency notes remains unchanged until the government decides to demonetise old notes or issue new ones. For example, the face value of the old Rs. 500 and Rs. 1,000 notes became zero post demonetisation in 2016.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.