Redemption fee

(redirected from Early Redemption Fees)

Redemption fee

A fee some mutual funds charge when an investor sells shares within a specified short period of time.

Redemption Fee

A fee that some mutual funds assess when a shareholder redeems shares from the fund during a certain, usually brief period of time after purchase. It may be a flat fee or a percentage of the value of the shares redeemed. Mutual funds charge redemption fees to discourage new investors from withdrawing from the mutual fund if the fund's net asset value drops unexpectedly.

Redemption fee.

Some open-end mutual funds impose a redemption fee when you sell shares in the fund, often during a specific, and sometimes brief, period of time after you purchase those shares.

The fee is usually a percentage of the value of the shares you sell, but it may also be a flat fee, or fixed amount.

The purpose of the fee is to prevent large-scale withdrawals from the fund in response to changes in the financial markets, which might require the fund manager to sell holdings at a loss in order to meet the fund's obligation to buy back your shares.

References in periodicals archive ?
In addition to commission-free trades, the OneSource ETF platform has no enrollment requirements nor early redemption fees, which Schwab says differentiates its platform from other commission-free ETF offerings.
If you want to repay a loan off earlier, there will usually be early redemption fees, which will be a percentage of the outstanding balance.
9 million in pretax early redemption fees in the prior-year period, pretax earnings soared 25.
The loan is exempt from credit handling fees and early redemption fees.
Following a Central Bank regulation issued early this year, most banks have imposed uniform early redemption fees on personal loans and car loans.
In addition, another lender is currently writing to mortgage clients offering to waive early redemption fees in an effort to get them to remortgage elsewhere
Under the plans, B&B will cease new lending and offer incentives to existing customers to move their mortgages elsewhere through measures such as waiving early redemption fees.
com, said: "It is ludicrous to tie into a contract for this time - though there are no early redemption fees after ten years.
CDs and other fixed income investments usually have early redemption fees and market fluctuation risks if not held to maturity.
More than a third of people who have never changed their home loan said they were put off doing so because of the costs involved, such as early redemption fees and legal bills, despite the fact that they would save money in the longrun.
Egg, the online bank, reckons that 70 per cent of personal loans taken out in 2002 will be repaid early, costing pounds 332m in early redemption fees.

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