Exchange Fees

DEFINITION of 'Exchange Fees'

A type of investment fee that some mutual funds charge to shareholders if they transfer to another fund within the same group. Other fees shareholders may encounter include sales loads, redemption fees, purchase fees, account fees, 12b-1 fees and management fees.

BREAKING DOWN 'Exchange Fees'

Investors should be aware of all fees, both direct and indirect, related to their investments. Fees have a significant impact on total returns and a fund that charges higher fees will not necessarily lead to higher profits for the investor. The SEC does not generally limit mutual fund fees, although FINRA imposes some limits. To make similar investments with lower fees, consider investing in exchange-traded funds.

RELATED TERMS
  1. Clearing Fee

    A fee charged by a clearing house for its services. A clearing ...
  2. 12B-1 Fee

    An annual marketing or distribution fee on a mutual fund. The ...
  3. Fee Income

    Revenue taken in by financial institutions from account-related ...
  4. Cumulative Discount Privilege

    A way that an investor in a mutual fund can qualify for lowered ...
  5. Garbage Fees

    Unnecessary fees tacked onto mortgage closing costs by lenders ...
  6. Service Shares

    Mutual fund units that charge service fees to their shareholders. ...
Related Articles
  1. Professionals

    Fees

    CFA Level 1 - Fees. Learn the basics behind the fees charged by mutual funds. Describes different methods of assessing fees and their impact on investors.
  2. Mutual Funds & ETFs

    How Mutual Fund Companies Make Money

    Read about the many different kinds of fees and sales charges mutual fund companies can use to generate revenue from those who invest in their shares.
  3. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  4. Mutual Funds & ETFs

    A Guide To Investor Fees

    Fees are one of the most important determinants of investment performance and something that every investor should know.
  5. Investing Basics

    Are Fees Eating Up Your Nest Egg?

    You may not be able to avoid all fees associated with retirement planning, but you should know what you’re being charged for. Here's a list of common fees.
  6. Investing Basics

    How To Optimize Your Portfolio and Reduce Fees

    Investment fees aren't avoidable altogether, but there are strategies investors can employ to keep those fees at bay and reduce the impact on returns.
  7. Professionals

    Costs And Fees Associated With Investments

    Section 10: Customer Accounts
  8. Budgeting

    Investment Service Fees

    Spot and avoid the money wasters that are slowly eating away at your wallet and bank account.
  9. Investing Basics

    What is a 12b-1 Fee?

    Mutual funds typically charge between .25% and 1% in 12b-1 fees for marketing, distribution and administration expenses.
  10. Investing Basics

    3 Investment Fees That Are Negotiable

    Investment fees are a necessary evil but that doesn't mean they have to be overly costly. There are ways to negotiate some of the expenses down.
RELATED FAQS
  1. What is considered a reasonable 12b-1 fee?

    Learn what is generally considered to be a reasonable 12b-1 fee, what these fees are charged for and how these fees are regulated. Read Answer >>
  2. Where do I look for fees that I am charged on investments? What are those fees called?

    The fees and expenses charged for investments vary. The fees usually depend on the type of investment and the investment ... Read Answer >>
  3. Why is the 12b-1 fee controversial?

    Learn about the 12b-1 fee that is applied to many mutual funds, and why a large number of analysts and investors question ... Read Answer >>
  4. In what situations would mutual fund fees be higher than ETF fees?

    Compare the fees associated with investing in mutual funds and exchange-traded funds and find out why ETF fees are usually ... Read Answer >>
  5. What kinds of fees are involved in futures trading?

    Learn what the various costs are that are charged by brokerage firms and trading exchanges to individual futures trading ... Read Answer >>
  6. How do mutual fund expense ratios affect returns?

    Learn what kinds of mutual fund fees there are, how to find out what fees your funds have and how they impact the future ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center