Any withdrawal charges from mutual fund units?

Any withdrawal charges from mutual fund units?

It is well known that investing in mutual funds is safe and gives high interest returns.

Due to this, the number of people investing in mutual funds in India is increasing year by year.

Are there withdrawal charges for those who have invested in mutual funds? What are the charges? Let’s see now.

Charges from mutual fund units:

Open ended mutual funds
Evacuation fee
Before the specified time
Example
Securities Transaction Tax

Open ended mutual funds :

Generally, if investors invest in open-ended mutual funds, there is no charge if the investment is withdrawn after a certain period of time. But at the same time if an investor wants to withdraw his investment before the stipulated period, an exit fee is charged.

Evacuation fee :

If investors withdraw their investments before completing a certain period in the mutual fund, an exit fee of a certain percentage is charged. This percentage varies from fund to fund. It is important to note that this exit fee is meant to prevent short-term investors from investing in a long-term investment scheme.

Before the specified time :

If investors cash out their holding units before a certain period, a certain percentage of NAV is charged as exit fee. Especially if the money is withdrawn within one year of the investment, it will be subject to a 1% withdrawal charge.

Example :

For example if a company’s mutual fund NAV is Rs.100 and you get your investment before one year of investing in it, you will get only Rs.99 per unit. Because 1% exit fee will be deducted. So while you are investing in mutual fund you should make sure in advance how long you are holding the investment. Thus the investment can be protected without any exit charges.

Securities Transaction Tax

Also equity based financial transactions are subject to Securities Transaction Tax (STT). It is important to note that every time you buy or sell units, you will have to pay STT along with your transaction cost.

By Karthik

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