Market Basics · Chapter 4 / 36
Exit load — when and how AMCs charge it
A penalty for early redemption. Designed to deter short-term churn; doesn't usually apply after 1 year.
Exit load is a redemption fee — a percentage of the redeemed amount deducted at the time of sale if you sell within a specified holding period. It's the fund's tool to discourage short-term churn that hurts the rest of the unit-holders.
Typical exit-load structures
| Category | Typical exit load |
|---|---|
| Equity funds (most) | 1% if redeemed within 12 months |
| Aggressive Hybrid | 1% if redeemed within 12 months |
| ELSS | None (3-year lock-in already enforces holding) |
| Debt — Short Duration / Medium | None to 0.25% |
| Liquid funds | Graded — 0.0070% to 0.0045% on Day 1-6 of holding, 0% after Day 7 |
| Overnight funds | None |
| Index funds | None to 0.25% |
SEBI caps the maximum exit load at 5% (rarely used in practice).
How it's applied
If you redeem ₹1,00,000 from an equity fund within 12 months with a 1% exit load:
- Gross redemption: ₹1,00,000.
- Exit load: ₹1,000.
- Net credit to bank: ₹99,000.
The exit load goes back into the scheme — it's not retained by the AMC. It effectively gets distributed across remaining unit-holders.
Per-instalment for SIPs
The 12-month exit-load clock runs per instalment, just like the LTCG clock. A SIP started in January 2025: redeeming all units in December 2025 charges exit load on every instalment from Jan-Nov (each is still inside its 12-month window). The January instalment from the next year's SIP would be inside its own 12-month window separately.
Liquid fund graded load (since 2019)
To discourage same-day "park and redeem" speculation, SEBI introduced a graded exit load on liquid funds in October 2019:
- Day 1: 0.0070%
- Day 2: 0.0065%
- ...graded down...
- Day 6: 0.0045%
- Day 7 onwards: 0%
The amounts are deliberately small — designed not to penalise genuine short-term parking, just to make true intraday speculation costly.
Reading the scheme info
Every scheme's Scheme Information Document (SID) lists the exit load. Always check before redeeming early. The AMC website's "Exit Load" field on the scheme page is the canonical source.
Sources
- SEBI — Mutual Fund Regulations (exit load provisions) · accessed Jun 2026
- SEBI — Graded Exit Load on Liquid Funds (Circular dated 24 September 2019) · accessed Jun 2026