Beginner

When it comes to money management, it is always vital for the investors to know the expenses associated with their investments, as such costs and charges directly eat into their returns. Some of the expenses may be unavoidable for the investors, like fund management expenses, etc., for it adds value to the mutual fund scheme. However, investors may avoid one such charge if they diligently plan for their investment redemption, i.e., exit load.

What is Exit Load?

Mutual funds are investment products that create a portfolio of securities from the money invested by different investors. The investment decisions are made by professional fund managers and a team of research analysts. As compensation for the fund management services, mutual funds charge certain expenses to the scheme through Total Expense Ratio (TER) towards fund management fee, selling and distribution costs, investor awareness expenses, etc.

investors can choose to invest in different mutual fund schemes to suit their risk appetite, financial goals, and investment horizon. People generally consider liquid funds and debt funds as different mutual fund categories. However, this is not the case.

Debt funds are a larger category of mutual fund schemes, which include overnight funds, liquid funds, duration funds, gilt funds, credit opportunities funds, etc. A liquid fund is a subset within the broader universe of debt funds.

As per SEBI (Securities & Exchange Board of India) guidelines on mutual fund schemes’' categorisation, liquid funds are debt funds that invest primarily in debt and money market securities with a maturity of up to 91 days. Accordingly, such funds invest in Treasury Bills (T-Bills), Commercial Papers (CP), Certificates of Deposit (CD), etc.

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Save Tax as well as Create Wealth with Equity Linked Saving Scheme Save Tax as well as Create Wealth with Equity Linked Saving Scheme

New-age and millennial investors prefer investing in equities directly as they can track the movements of their top stock picks and attribute the investment performance to themselves. Further, the intra-day price movements in share prices create further excitement for some investors. However, direct equity investing may be complex since it requires a lot of research and adequate knowledge of stock markets in general.

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