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What do front-end charges and back-end charges mean when buying a fund

2018-03-07 12:48:00

When buying funds, we often see the option of front-end charges and back-end charges. What does that mean


First of all, we should clear a concept, that is, whether you choose front-end charges or back-end charges, you need to pay another redemption fee when you redeem. Before I did not buy the stock base, I thought that the front charge means that the front charge is collected, and the back is not collected, it seems that I am too underestimate the securities, people rely on the commission to make money ah.


So what do front-end charges and back-end charges mean? The answer is: subscription fee, which is a handling fee that needs to be paid at the time of purchase. Under normal circumstances is to charge 1.5% service fee, that is, you buy 1000 yuan of funds, this front-end service fee will have to spend 15 yuan, plus under normal circumstances the redemption fee is 0.5%, about 5 yuan, a buy and sell at least 20 yuan profit to sell it does not lose money. Of course, with the intensification of competition among various Internet finance giants, the rate is constantly declining, and some websites will discount the subscription rate by 40% or 60%. There are more discounts on the official website, and the speed of the account is slightly faster, it is suggested that you can consider going to the official website of each fund to buy, not enough disadvantages is that the official website only sells its own home, and the third-party fund website can buy more than one.


So why are there front-end charges and back-end charges? I don't know what city you live in, my city, there is a card machine on the bus, brush on the car, get off and brush again, calculate the fee you need to pay according to the mileage. Of course, there are also coin-operated machines on the bus, which are specially set up for people who do not have a bus pass, and such people need to pay the fare for the furthest distance. The front-end charge and the back-end charge, in fact, one is the coin machine, the other is the card charging. Coin-operated, that is, front-end charges, need to be paid in full at the time of purchase of funds; The swipe card, that is, the back-end consumption, according to the length of time you hold the fund to charge different fees, of course, the opposite of the bus is, the longer the holding time to charge less fees, generally limited to years, holding time up to 5 years or more, generally exempted from subscription fees.


To sum up, if you buy a fund to hold for a short time, or choose front-end charges, if holding for a long time, it is recommended to choose back-end charges.

Matters needing attention

Stock bases are risky and should be purchased with caution