Exit load

A charge a mutual fund deducts when units are redeemed before a set period, to discourage short-term money moving in and out. A common equity fund structure is 1% on units redeemed within a year of purchase and nothing after.

Redeem ₹1,00,000 eight months after buying, under a 1% load, and you receive ₹99,000. That ₹1,000 goes back into the scheme, where it compensates the investors who stayed for the cost of selling holdings to pay the leaver.

Loads differ by scheme and change over time, and they apply to each SIP instalment from its own purchase date, so part of a holding can be free to redeem while the rest isn't. Equity-linked savings schemes use a three-year lock-in instead.

Check the load before redeeming early.