It is also called a back-end load.
It is a fee paid to sell a specific investment.
It is expressed as a percentage of the amount invested, and may also be called an exit fee or a redemption charge.
Contingent deferred sales charges are not included in the total expense ratios, quoted by mutual funds, as they are a one-time cost.
They are paid by the mutual fund investors when they sell Class-B fund shares in a particular number of years on the same date on which they were initially bought.
The CDSC is a reducing charge.
It reduces annually and becomes zero upon completion of 4 years from the date of investment.
A fund might charge a 6% redemption fee for a holding period of less than one year, a 5% fee for a holding period of one to two years, and so forth.
Mutual funds with a contingent deferred sales charge also generally levy an annual 12b-1 fee.