What is entry load?

What is entry load?

Entry load refers to a fee that was historically charged to investors at the time of purchasing units in a mutual fund scheme. It was deducted upfront from the investment amount, reducing the actual amount invested in the scheme. The entry load primarily covered distributor and marketing costs.

For example, if you invested ₹10,000 in a mutual fund with a 2% entry load, ₹200 would go toward fees, and only ₹9,800 would be allocated to units in the fund.

However, this practice is no longer allowed. The Securities and Exchange Board of India (SEBI) abolished entry loads effective from August 1, 2009. Since then, mutual fund purchases are not subject to any upfront deduction.

Key points about entry load

  • Charged at the time of investment (no longer applicable)
  • Reduced the effective investment amount
  • Covered distributor commissions and related costs
  • Banned by SEBI to promote transparency

What if...

ScenarioExplanation
You’re charged upfront todayEntry loads are banned—report any such charge to your broker or SEBI.
You review old investment statementsPre-2009 investments may show deducted entry load amounts.
You compare regular and direct plansCost differences are due to commissions—not entry load.
You expect full investment allocationNow 100% of your contribution is invested as entry loads are discontinued.
If you’re charged an entry load, report it immediately to your broker or SEBI, as the practice is banned.

Last updated: 16 Jun 2025

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