Exit Load

Key Highlights

• An exit load is a small fee that mutual funds charge if you withdraw your money before a certain time.

• Exit Load = Exit Load Percentage × NAV × No of Units

What is Exit Load?

An exit load is a small fee that mutual funds charge if you withdraw your money before a certain time. Think of it as a way to encourage staying invested for the long term.

Importance of Exit Load

• To Discourage Frequent Withdrawals: Constant buying and selling can affect the fund’s performance.

• To Protect Long-Term Investors: It ensures stability and fairness for those who stick with the fund.

How is Exit Load Calculated?

Exit Load = Exit Load Percentage × NAV × No of Units

Example:

If you want to withdraw ₹10,000 from a fund with a 1% exit load:

Exit Load = 1% × ₹10,000 = ₹100

After the fee, you’d get ₹9,900.