Exit Fee

Exit Fee - An exit fee is a commission paid or a sales charge paid when a specific individual sells their investment. These could include annuities or mutual funds. This is intended to discouraging investors from making withdrawals. This transaction charge is also known as a deferred sales change back-end load, or a redemption fee. These fees are also charged on hedge funds, and limited partnership units. Sometimes, managers of these funds attempt to devise strategies that will keep daily liquidity at a minimum, so the exit fee acts as a deterrent for an investor wishing to proceed with an early withdrawal.