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. Human Capital, An Important Asset For ...
    Investing Basics

    Human Capital, An Important Asset For ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center