Mutual funds offer complete liquidity so that when you need to redeem your shares, the proceeds are immediately available to you by a variety of convenient methods. On any day the fund is open you can arrange to sell your shares and the fund will buy them back from you at the current net asset value.

Most money market mutual funds (and some other fixed-income funds) offer check writing privileges. The fund provides you with checks that you may draw against the value of the shares in your account. You may write a check payable to yourself and deposit or cash it at your bank, or you can use it to pay your monthly mortgage and other bills and continue to earn dividends on your funds until the check clears the mutual fund. Most funds impose a minimum check amount, and some limit the number of checks that can be drawn within a certain time period.

Most fund families offer telephone exchange privileges among funds in the same family. This enables you to telephone the fund and ask that a certain dollar amount of shares be redeemed from your stock fund. The fund has seven days to transfer it into your money market fund. (The transaction normally takes three or four days.) You may then write a check against the money market fund, in effect gaining immediate access to the money in the stock fund.

Many funds offer wire redemption, which enables you to have the proceeds of shares you sell deposited directly into your checking account through the bank wire-transfer system. Some mutual funds require redemption requests to be in writing, accompanied by a signature guarantee. This policy is designed to protect consumers by preventing unauthorized or fraudulent transactions. A signature guarantee can be obtained from any commercial bank. If your savings bank cannot provide a signature guarantee, ask it to recommend a corresponding commercial bank that can.