How do I calculate the Exit Load of my mutual fund investments?
Exit Loads are minor penalties imposed by the AMCs to discourage premature withdrawals/redemption in Mutual Funds. Learn more on Exit Loads here .
Exit load is calculated for each investment/SIP done and as per the exit load mentioned in the factsheet for the month, when the fund has been purchased.
The Exit Load of a Mutual Fund is calculated on the Net Asset Value (NAV) of the fund.
Here is an example to understand Exit Loads:
Let’s say you have made an investment for Rs.5000 in an X mutual fund on 1st June 2021 and the exit load as per the factsheet of the fund is 1%.
Let us take the NAV of the fund to be Rs.50. Here is how the NAV is calculated.
Therefore, you would’ve received 100 units for your investment.
On 1st August 2021, you decide to redeem the mutual fund and place a redemption order. The NAV of your mutual fund is now Rs.60.
Where is the 1% deducted?
The 1% Exit Load is deducted from the latest NAV (the NAV of the day you are redeeming the mutual fund). If the NAV is Rs.60 at the time of redemption, then, the calculation will be as follows:
1% of Rs.60 = Rs.0.6 multiplied by the number of units will be deducted from the redemption amount as Exit Load.
0.6 (Exit Load per unit) * 100 (Total number of units redeemed) = Rs.60 (Exit Load Amount)
Your investment is Rs.6000 - Rs.60 = Rs.5940 (Redeemable amount).
This is how the Exit Load is calculated.