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Does SIP have an exit load?

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Does SIP have an exit load?

Yes, SIPs can be subject to exit loads, which depend on the mutual fund scheme you're investing in. 
Does SIP have an exit load?

If a mutual fund specifies an exit load for a certain period, the same exit load will apply to SIP investments as well. Exit loads are typically imposed to discourage premature withdrawals and to cover administrative costs associated with redemptions.

For example, many equity funds impose an exit load of 1% if redeemed before completing one year from the date of investment. However, if you redeem your investment after one year, there's usually no exit load.

It's important to understand that in the case of SIPs, each installment is treated as a separate investment. So, if you redeem your SIP before the specified period and there's an exit load applicable, it will be calculated based on the value of the units being redeemed at that time.

For instance, if there's a 1% exit load for redemptions before one year, and you redeem ₹100,000 before completing a year, the exit load will be 1% of the total redeemed amount, which would amount to ₹1,000.

Therefore, before investing in SIPs, it's crucial to check the terms and conditions of the mutual fund scheme regarding exit loads to avoid any surprises when redeeming your investments.

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