Exit Fee

AAA

DEFINITION of 'Exit Fee'

A fee or charge assessed to an investor for withdrawing money prior to a previously stipulated date. This is almost always expressed and charged as a percentage of assets rather than a flat fee.

May also be known as a "redemption fee", "back-end load" or "contingent deferred sales charge".

INVESTOPEDIA EXPLAINS 'Exit Fee'

Exit Fees may be found not only on mutual funds as back-end loads, but also on hedge funds, annuities and limited partnership units. Often the managers of these funds employ investing strategies that keep daily liquidity to a minimum, and the exit fees act as a deterrent to early withdrawals.

RELATED TERMS
  1. Back-End Load

    A fee (sales charge or load) that investors pay when selling ...
  2. Contingent Deferred Sales Charge ...

    A fee (sales charge or load) that mutual fund investors pay when ...
  3. Hedge Fund

    An aggressively managed portfolio of investments that uses advanced ...
  4. Load Fund

    A mutual fund that comes with a sales charge or commission. The ...
  5. Class B Shares

    A classification of common stock that may be accompanied by more ...
  6. Redemption Fee

    A fee collected by an investment company from traders practicing ...
Related Articles
  1. The Advantages Of Mutual Funds
    Mutual Funds & ETFs

    The Advantages Of Mutual Funds

  2. What do the different types of mutual ...
    Investing

    What do the different types of mutual ...

  3. Socially Responsible Mutual Funds
    Mutual Funds & ETFs

    Socially Responsible Mutual Funds

  4. What's the safest way to invest in high-yielding ...
    Trading Strategies

    What's the safest way to invest in high-yielding ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center