If you’ve invested in a mutual fund, a natural next question will be ‘how do I withdraw money from mutual funds’? What are the costs (if any) and what exactly is the process?
What is Exit Load
An exit load is essentially a withdrawal fee. Some mutual funds charge an exit load when you are withdrawing your investment. The exit load is expressed as a percentage of your entire investment e.g. 1%.
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Why Am I Paying a Fee to Withdraw Money
Exit loads are implemented by many mutual funds to discourage you from withdrawing your money too quickly, and ensure you invest for the long term (as you should, according to us). The best way to make money by investing is to invest for the long term, and ride the ups and downs of the stock market without withdrawing.
Many funds will charge an exit load only if you withdraw your funds in the first year of investing -after that, they may not charge you any fees to withdraw your money.
How do I know what the exit load is?
In the North Loop app, you can view all the information and fees of every fund we offer, including the exit load.
Tax on Withdrawing Money from Mutual Funds
When you’re withdrawing your money, remember to check the tax implications of this exit. Funds will have different tax implications (e.g. if it is a tax saver fund), and many times there is an additional tax added if you withdraw within the first year. You can check out the tax implications in the North Loop app by viewing the fund (we’ll also tell you when you’re doing a withdrawal)
How to Withdraw Funds from a Mutual Fund
You can withdraw your money from a mutual fund you’ve invested in with one simple tap in the North Loop. Go to the mutual fund in the app, and tap ‘Withdraw Money’ - you will then specify how much. Before confirming, we’ll show you any fees or tax implications so you can be 100% sure you want to withdraw. When you withdraw, you can specify which bank account you want to send the funds to.
Some mutual funds with exit loads
Here is an example of some mutual funds, and how they charge exit loads.
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