How do exit loads and lock-in periods work in mutual funds?
Exit loads and lock-in periods depend on the terms of the specific mutual fund scheme. These are set by the Asset Management Company (AMC), so they can vary from one scheme to another. Equity Linked Savings Scheme (ELSS) funds specifically have a mandatory 3-year lock-in period.
EXAMPLE:
- An exit load is a charge that may apply if you redeem your mutual fund units within the period defined for that scheme.
- A lock-in period means you cannot redeem your units until the lock-in ends.
- Equity Linked Savings Scheme (ELSS) funds have a mandatory 3-year lock-in period.
- For example, if the scheme shows Exit load: 0.25% on or before 3 days, nil after 3 days and Lock-in period: -, it means an exit load may apply if you redeem within 3 days, and no lock-in applies for that scheme.
Note: Before redeeming, check the scheme page, factsheet, and Key Information Memorandum (KIM) for the applicable exit load, lock-in period, and related conditions. For Systematic Investment Plan (SIP) investments, redemption is processed on a first in, first out (FIFO) basis, which means the units purchased first are redeemed first. Before placing the redemption request, check the investment date of each SIP installment to understand which units are eligible for redemption. In Equity Linked Savings Scheme (ELSS) SIP investments, each installment also has a separate 3-year lock-in period.
For more information on charges and Taxes Apply to Mutual Fund Investments in FYERS, refer this article.
What If?
| Scenario | Explanation |
|---|---|
| You want to redeem your mutual fund units | Check the scheme details to see whether any exit load or lock-in applies. |
| You are investing in an Equity Linked Savings Scheme (ELSS) fund | Redemption is not allowed before the 3-year lock-in period ends. |
| You are unsure about the charges or restrictions | Refer to the scheme page, factsheet, or Key Information Memorandum (KIM) for complete details. |
Last updated: 13 Apr 2026
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