What is Exit Load in Mutual Fund?

Description

Exit load in a mutual fund is a fee charged to investors when they redeem their units before a specified holding period. This fee is intended to discourage short-term trading and cover the costs incurred by the fund due to early withdrawals. The exit load is usually a percentage of the redeemed amount and is deducted from the redemption proceeds.

The percentage and holding period before which the exit load applies vary by mutual fund scheme. Investors should be aware of the exit load structure of a mutual fund before investing to avoid unexpected charges if they decide to withdraw their investment prematurely.