Exit load is a fee charged when you redeem your investments from a mutual fund. Mutual fund houses charge an exit load on mutual fund if you redeem before a stipulated period. An exit load is charged only for a specified duration only after which there is no exit load.

Exit load is charged by fund houses to discourage investors from hopping in and out of schemes. Different mutual fund schemes have different periods in which they levy exit loads.

But many mutual fund schemes do not charge any exit load, especially the debt mutual funds. Let us look into some of the debt funds without any exit load.

10 Debt Funds with No Exit Load

Whenever you decide to sell the units of mutual funds you own, an exit load may or may not be charged to you.

Here is the list of 10 debt funds which do not charge any exit load.

1. Indiabulls Liquid Fund

This is a liquid fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.29% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  6.91%
3 years  7.60%
5 years  8.25%

Invest in Indiabulls Liquid Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹4,541 Cr
Minimum SIP ₹1,000
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.07%
Exit Load NIL
Type  Open-ended

This liquid fund can be easily converted in to cash that too within a working day or two.

They invest in instruments with a maturity period of up to 91 days. Among all debt funds, liquid funds provide most stable returns.

2. HDFC Short Term Opportunities Fund

This is a short-term debt fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.68% since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  6.49%
3 years  7.98%
5 years  8.57%

Invest in HDFC Short Term Opportunities Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹9,490 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.25%
Exit Load NIL
Type  Open-ended

If you want to invest for a shorter duration, say for 3 months or more, this is one of the best debt funds for you to invest in.

The fund mostly relies on short-term corporate debt for returns, with sovereign exposures at 10-12% in the past one year.

Also, it maintains a very conservative portfolio, both on credit quality and duration. The fund’s asset size at ₹9,490 crore makes it one of the biggest in the category.

3. Franklin India Ultra Short Bond Fund

This is an ultra-short bond fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 9.53% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  8.05%
3 years  9.10%
5 years  9.49%

Invest in Franklin India Ultra Short Bond Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹6,979 Cr
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.35%
Exit Load NIL
Type  Open-ended

This fund invests in short-term debt securities with some small portion in long-term securities. The returns in this category are similar to the returns offered by short-term funds.

4. Aditya Birla Sun Life Short Term Fund

This is a short-term debt fund launched on January 1, 2013. It is a debt fund with low risk and has given a return of 8.88% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  6.36%
3 years  8.20%
5 years  8.77%

Invest in Aditya Birla Sun Life Short Term Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹19,445 Cr
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.26%
Exit Load NIL
Type  Open-ended

This scheme aims to generate current income and capital appreciation from a portfolio that invests 100% in debt and money market securities.

With an asset size topping ₹ 19,445 crores, the fund is the most popular fund in the category.

The fund usually relies more on corporate debt than sovereign debt.

5. Principal Cash Mgmt Fund

This is a liquid fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.24% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  6.93%
3 years  7.51%
5 years  8.20%

Invest in Principal Cash Mgmt Fund Now

Rating by Groww 5 star
AUM (Fund Size) ₹1,271 Cr
Minimum SIP Not Supported
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.15%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to provide income from short-term investments, consistent with preservation of capital and liquidity by investing in a portfolio of money market and in investment grade debt instruments.

6. Indiabulls Short Term Fund

This is a short-term debt fund launched on September 13, 2013. It is a debt fund with low risk and has given a return of 9.50% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  7.06%
3 years  9.10%
5 years  NA

Invest in Indiabulls Short Term Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹527 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 4 years old
Expense Ratio 0.5%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate stable returns over short-term with a low-risk strategy while maintaining liquidity through a portfolio consisting of debt and money market instruments.

7. DHFL Pramerica Short Maturity Fund 

This is a short-term debt fund launched on January 1, 2013. It is a debt fund with low risk and has given a return of 9.46% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  7.13%
3 years  8.83%
5 years 9.34%

Invest in DHFL Pramerica Short Maturity Fund Now 

Rating by Groww 4 star
AUM (Fund Size) ₹1,696 Cr
Minimum SIP ₹500
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.43%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate a steady return with low to medium market risk by investing in a portfolio of short-medium term debt and money market securities.

There will be 65-100% allocation to instruments with an average maturity up to 18 months and up to 35% allocation to instruments with an average maturity greater than 18 months.

8. Essel Liquid Fund

This is a liquid fund launched on January 1, 2013.

Returns per annum over the years from this fund are:

Duration Returns
1 year  6.96%
3 years  7.57%
5 years  8.29%

Invest in Essel Liquid Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹417 Cr
Minimum SIP Not Supported
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.07%
Exit Load NIL
Type  Open-ended

This fund invests in instruments with a maturity period of up to 91 days.

9. Indiabulls Ultra Short Term

This is an ultra-short bond fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 8.96% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  7.22%
3 years  8.49%
5 years  8.90%

Invest in Indiabulls Ultra Short Term Fund Now

Rating by Groww 4 star
AUM (Fund Size) ₹2,501 Cr
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.3%
Exit Load NIL
Type  Open-ended

This fund invests in short-term debt securities with some small portion of long-term securities.

The returns in this category are similar to the returns offered by short-term funds.

10. Aditya Birla Sun Life Floating Rate Fund – LTP

This is an ultra-short bond fund launched on January 1, 2013. It is a debt fund with very low risk and has given a return of 9.01% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  7.08%
3 years  8.46%
5 years  8.70%

Invest in Aditya Birla Sun Life Floating Rate Fund – LTP Now

Rating by Groww 4 star
AUM (Fund Size) ₹7513 Cr
Minimum SIP ₹1000
Minimum SWP ₹1000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark Crisil Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.17%
Exit Load NIL
Type  Open-ended

The objective of this scheme is to generate regular income through investment in a portfolio comprising substantially of floating rate debt or money market instruments. It may also invest a portion of its net assets in fixed rate debt securities and money market instruments.

Exit load is charged to compensate for your early withdrawal from the fund.

A mutual fund expects you to stay invested for a long duration. If too many people redeem their money from mutual funds, the mutual fund manager’s decision making is affected as the instability is too high.

Not only that, the investment of other investors also get affected. Therefore, it is in the interest of the mutual fund and long-term investors to discourage people from redeeming too soon. The exit load is meant to act as a discouragement to people who wish to withdraw their money from a mutual fund.

The exit load is mostly higher for short duration and lower for a longer duration. In most cases, after a certain period of time, there is no exit load applicable.

When investing, there are various factors besides the exit load you must consider. Exit load isn’t one of the primary factors to consider. However, if you don’t wish to pay for exit load on debt mutual fund, you can pick a fund from above mention 10 debt funds.

But remember, avoiding exit load mutual funds will prevent you from choosing good funds.

Mutual funds do a wonderful job of handling and guiding your investments. If you want to invest in mutual funds for the short-term, you should invest in debt mutual funds.These mutual funds have lower returns as compared to equity mutual funds but they are also less risky.

To look at some of the best performing funds from every category of mutual funds, check out Groww 30 best mutual funds to invest in 2018.

Happy Investing!

Disclaimer: the views expressed here are of the author and do not reflect those of Groww.