Exit Load
Exit load is a fee charged by mutual funds when an investor redeems their units before a specified holding period. It is usually a percentage of the redemption amount and is meant to discourage early withdrawals that can affect the fund’s performance and stability. The exit load varies by fund type and is set by the fund manager. Equity funds often have higher exit loads to promote long-term investing, while liquid funds and debt funds usually have little or no exit load. Understanding this fee helps investors plan their exits better and avoid unnecessary costs that may reduce returns.
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