Concepts· 5 min read· Updated April 2026

Exit load and lock-in periods — the rules for getting your money back out

Investing is easy. Withdrawing at the wrong time costs you. Here is what exit load is, which funds have lock-ins, and how to plan redemptions without unnecessary charges.

Key takeaways
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Exit load = penalty for redeeming too early, typically 1% within 1 year for equity funds
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ELSS has mandatory 3-year lock-in — you literally cannot withdraw before 3 years
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Liquid funds have no exit load after 7 days — best vehicle for emergency funds
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Each SIP instalment has its own 1-year clock for exit load purposes
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Planning withdrawals just past the 1-year mark avoids exit load entirely
👩‍💼
PriyaAge 30·Consultant, Pune
"

I needed ₹1 lakh in August. I sold some of my mid-cap fund that I'd bought in March. I got slightly less than expected.

The shortfall was exit load — 1% for redeeming within 12 months of purchase. On ₹1 lakh, that's ₹1,000 lost. Small but avoidable with planning.

Exit load vs lock-in — two very different things
Exit load
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You CAN redeem early — but pay a small fee
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Typically 1% if sold within 12 months
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Applies to most equity and hybrid funds
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After the window: zero exit load forever
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Exit load goes BACK into the fund's NAV (not to AMC)
Lock-in period
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You CANNOT redeem at all before the period ends
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ELSS: 3 years per instalment (SEBI mandate)
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PPF: 15 years (partial withdrawal from year 7)
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Tax-saving FD: 5 years
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Breaking a lock-in is genuinely impossible — not just penalised
Exit load by fund type
Fund typeExit load periodExit load amountAfter period
Equity (most)12 months1.0%Zero forever
ELSS3-year lock-inN/A (cannot exit)Zero after lock-in
Balanced Advantage12 months1.0%Zero
Aggressive Hybrid12 months1.0%Zero
Liquid fund7 days0.007%–0.0045%Zero after day 7
Short Duration debtUsually none0%Zero always
Long Duration debtUsually none0%Zero always
Sectoral/Thematic12 months1.0%Zero
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How to avoid exit load with SIP — the calendar trick
Each SIP instalment has its own independent 12-month clock. If you started a SIP in January 2024: • January instalment: exit-load-free from January 2025 • February instalment: exit-load-free from February 2025 • March instalment: exit-load-free from March 2025 If you want to redeem ₹50,000 in February 2025: platforms automatically sell your oldest units first (FIFO) — which are already past 12 months. Pro tip: set a calendar reminder for 366 days after any lumpsum investment. That's when you can sell without exit load.
⚠Educational content only. Numbers shown are illustrative — actual returns vary. This is not investment advice. Consult a SEBI-registered financial advisor before investing.

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