Exit load is a charge imposed by an Asset Management Company (AMC) when an investor exits a mutual fund scheme—either by redeeming units or switching to another scheme—within a specified period. It is expressed as a percentage of the redemption amount and is deducted from the NAV payable to the investor.
This fee is designed to discourage short-term withdrawals and protect the interests of long-term investors by maintaining fund stability.
Key points about exit load
- Charged on redemptions or switches made before the specified holding period
- Typically ranges from 0.25% to 1% for equity funds; may be zero for liquid funds
- Not applicable once the minimum holding period is met
- Shown transparently in redemption breakdown and fund factsheet
What if...
| Scenario | Explanation |
|---|
| You redeem units before 1 year | You may be charged an exit load if the scheme mandates a minimum holding period. |
| You hold beyond the lock-in period | No exit load is applicable once the holding criteria is met. |
| You switch between schemes | Exit load applies if the switch is made before the stipulated period. |
| You're investing in liquid funds | Most liquid funds do not charge exit load after 7 days, but always check the scheme document. |
Always review the fund’s exit load structure before investing or redeeming. It can impact your net returns if you plan to exit early.
Last updated: 16 Jun 2025
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