Redemption Fee

A redemption fee is a charge that some mutual funds or financial institutions may impose when an investor sells or redeems their shares within a specific time frame, typically a few months. The fee is intended to discourage short-term trading and compensate for the administrative costs associated with the redemption. Redemption fees can vary across funds and are usually outlined in the investment's offering documents. Investors should be aware of these fees before investing, as they can impact their overall returns.