The Concept of Exit Load for Mutual Fund SIP !!
CA Bhaskar Abhishek
11/30/20241 min read
Almost all the investors mistake the Exit Load Concept in the case of SIP Redemption. If a SIP has an exit load of 1% after a year, it does not relate to all the 12 instalments of SIP. 1 year means one year for each separate instalment. However, investors get confused and think that the exit load would not be applicable if a SIP has completed its 1 year after paying all the 12 instalments. Unfortunately, this is not the case.
So during redemption of an SIP in January 2018 that was started in January 2017 and continued till December 2017, exit load would not be applicable only on the first installment i.e. January 2017 and will be applicable for the rest of the 11 installments i.e. from February 2017 to December 2017.
Similarly, if the same SIP is redeemed in June 2018, exit load will not be applicable on the instalments paid from January 2017 to June 2017 and will be applicable on instalments from July 2017 to December 2017.
So dear investors, keep this concept in your mind while redeeming the units of mutual fund. This will help you save on the exit load you pay on redemption.
Thank You !!
Keep Investing, Keep Growing :)
Article by CA Bhaskar Abhishek
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