All You Need To Know About Pretermination Charge

A pre-termination charge is a fee charged by most investment companies when an investor decides to liquidate his investment before the agreed maturity date. Some companies refer to it as redemption or liquidation fee and it is usually stated in the brochure or policy document of any investment.

The policy differs with investment houses but typically, it is either a percentage of the total investment or, a percentage of the accrued investment. For instance, if a customer invests 100 million Naira and earns 1 million Naira in 2 months if he has to pay a pre-termination fee of 30% on the accrued interest, he will be paying the investment house, 300,000 Naira which is why we do not subscribe to Pre-termination fees at SFS Fund (SFS Fixed Income Fund).

While we understand that some investment houses do this to mitigate against loss that may arise from pre-termination or, as a strategy to minimize withdrawals by investors, thereby keeping the NAV high, we (SFS Fund Managers) prefer to simplify investment for our clients. This includes eradicating any form of hidden charges that could be a burden to our clients. This is because, from experience, we know that investors may genuinely have emergencies or pressing needs that require them to pre-terminate their investment. In such situations, we do not want to deprive them of their funds or make it difficult for them to make withdrawals. Therefore, investors earn all their accrued interest without any charges whether at pretermination or at maturity. Not forgetting that our rates are equally net of tax and withdrawals can be made on any business day using any of our digital channels stated below:

Website: www.sfsfund.com

USSD: *884# (Available to MTN subscribers only)

We only advise our investors to allow us to hold their funds for a minimum of 7 to 30 days to allow the funds to earn some interest.

To learn more about SFS Fund, visit https://sfsfund.com/faqs