Entry Load

What is an Entry Load?

An entry load is a charge that mutual funds used to apply at the time of investment. It was a small percentage of the total cost of investment to compensate for their expenses involved in acquiring new investors by investing money in marketing and other administration works.

However, entry loads are not allowed anymore in India. In 2009, SEBI (Securities and Exchange Board of India) abolished this charge in the case of direct investments to make it cheaper and easier on the pockets for investors to get into mutual funds.

How Entry Loads Worked?

Purpose: The fee served to help mutual funds pay the costs of distribution and administration.

Impact: For an entry load of 2%, your ₹1,00,000 investment would fetch you ₹2,000 for the fee, and just ₹98,000 would actually go to the fund.

Current Scenario

Presently, most mutual funds in India do not charge an entry load, especially direct plans. This change has ensured investment is more transparent and investor-friendly, wherein your whole invested amount works for you.