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Market Intelligence › Basic Terminologies
How the load period is calculated, and how it is applied on top of NAV
Published by The Retail Trader · JUL 28, 2026 · Mutual Funds & AMC
Exit load is a charge a fund levies when you withdraw your money before a set period. Its purpose is to protect the fund from money that keeps coming and going.
The load is applied as a percentage of the redemption value and is deducted from the amount you receive. It does not show up in the NAV; it is deducted separately.
Each unit has its own holding period. In an SIP every installment is a separate purchase, so older installments may be load-free while newer ones are not.
These points often come as a surprise:
• In most equity funds the load applies for less than one year, but it depends on the scheme.
• Liquid and overnight funds have a graded load over a very short period.
• A switch is also treated as a redemption, so load can apply to it as well.
• Load and short term capital gains tax are two different things, and both can apply together.
Checking the load structure in the scheme information document before you redeem takes two minutes. Often, waiting just a few more days avoids the load entirely, and that saving is more certain than any timing guess.
This article is for educational purposes only. It is not a buy or sell recommendation, not a claim of guaranteed returns, and not advice. Rules, rates and mechanics change from time to time at the exchanges, SEBI and the RBI, so verify every number yourself with your broker or an official source.