How exit load works
An exit load is deducted from your redemption proceeds if you sell units within a defined window. A common structure is 1% if redeemed within 365 days, nil thereafter. So redeeming Rs 1,00,000 worth of units inside the load period at a 1% load nets you Rs 99,000; wait past the window and you pay nothing.
Where you see it
- Equity funds often charge ~1% for the first year.
- Liquid and overnight funds typically have no exit load, or a tiny graded load in the first few days.
- Some debt and hybrid funds use tiered loads that taper over months.
Exit load is separate from the expense ratio (TER), which you pay continuously, and from capital gains tax, which the government levies. All three reduce your net outcome but are charged by different parties.
Why it matters
Exit loads exist to protect long-term investors from the churn costs of frequent traders. Always check a scheme's load structure before redeeming, especially for goals shorter than a year. To see how recurring fees compound separately from one-off loads, try the direct-vs-regular cost calculator. FindMF takes no commission on any transaction.