Surrender Fees

Surrender fees are fees for selling or withdrawing money from an investment before a set period has passed. 

They are often phased out over a period of years—and vary by specific investment options—but generally involve a reduction of 1% to 2% per year until the surrender fee is no longer charged. 

For example, an annuity with a 10-year, 10% surrender fee would charge 10% the first year to move money out of the annuity, 9% the second year, and so on, until there is no surrender fee after the 10-year period.