Definition of "Back-End Load"

A redemption charge an investor or policyholder pays for withdrawing money from an investment or policy. This is most common in mutual funds and annuities and is designed to discourage withdrawals. Back-end loads generally decline for each year the individual remains in the fund or contract.

A fee that an investor pays when redeeming (withdrawing) funds from an investment--also called "deferred sales charge." The fee is usually dependent on how long the investment is held--the longer the time period, the smaller the fee. Mutual funds and annuities are the most common investments with back-end loads.