Mutual funds, like most other forms of investment, generally incur certain fees for those choosing to put money into them. The main types of fees you will encounter when dealing with mutual funds are brokerage commissions, exchange fees, contingent deferred sales loads (CDSLs), and early redemption fees. The U.S. Securities and Exchange Commission has an informative Web site page that details what types of fees mutual fund companies may legally charge individuals who choose to invest in their collective fund, and how these companies might go about charging such fees.

Brokerage commissions or brokerage fees are fees paid to the mutual fund’s broker, and are usually already worked into the upfront price of the fund. They are determined directly by what is called the portfolio turnover, or the number of times within one year that the monies or securities in the fund are bought and sold by investors.

A contingent deferred sales load (CDSL) may be a fee charged in place of an upfront fund fee, the amount of which changes depending on when the investor sells their fund shares. For example, the investor would be charged the highest rate if selling shares after only one year, but the fee might go down a percentage after an additional year, and go down again after a third year.

Exchange fees are a type of fee that is sometimes charged if the investor decides to sell shares in one fund in order to purchase shares in another fund in the same mutual fund group.