Sunday, January 2, 2011

Deferred Charge

A deferred charge is a fee charged by the fund upon investors exiting/withdrawing their funds. Some of these charges are structured to incentivise or encourage long term investing, with the percentage rate decreasing as the years invested increase through time. The fee is generally charged as a sales fee, with proceeds going toward distribution and promotion costs. It pays to be aware of the nature and quantum of fees being charge on an investment product before investing.

Synonyms: Deferred sales charge, Contingent deferred sales charge, Exit fee, Withdrawal fee

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