When investing in mutual funds, the two key charges you may incur are entry load and exit load. The entry load is a charge taken at the time of buying units of a mutual fund and the exit load is charged while selling those units. An entry load is a fee charged when you purchase units of a mutual fund, which was historically used to cover distribution and administrative costs. On the other hand, an exit load is a fee imposed when you sell or redeem your mutual fund units before a specified period. This charge is designed to discourage premature withdrawals and can vary depending on the type of fund and the duration of your investment. By knowing how the entry load vs exit load charges work, how they are calculated, and their implications on your investment strategy, you can make more informed decisions, avoid unnecessary fees and maximise your returns.
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