Exit load

It is the fee levied by the fund house to discourage investors from early withdrawals.

In order to refrain investors from leaving the mutual fund scheme, or to decrease the number of withdrawals by investors, this exit load is collected when participants leave the scheme. Different mutual fund companies have varying exit loads.

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Typically, in most MFs, AMCs levy an exit load of 1 percent of the Net Asset Value or NAV, if the units get sold within a year of purchase. There is no exit load if we sell units off after a year of holding them.

Of course, exit loads vary across fund houses and products. ln debt-related MFs, including liquid funds, the period in which exit load is valid can be just one day since purchase, because the maturity period, itself, is short.