What is Exit Load?
- It is the fee that the mutual fund company charges from investors at the time of exiting or redeeming the units of a scheme.
- It is also referred to as a pre-exit penalty, if the investor exits the scheme before the expiry of the lock-in period.
- Since it increases the cost borne by investors and is not included in the expense ratio, it must be considered before making an investment.
For example, you have invested Rs 1000 and exit lead is 2%, then you will have to pay Rs 20 (2%of 1000) as the penalty in case of early withdrawal.