Funds like to impose them to reduce market-timing behavior and frequent trading, and to provide an incentive for long-term investments.
The mutual fund reinvests redemption fees into the fund, benefiting the remaining shareholders. If you're a long-term investor, redemption fees can be good for you since short-term investors will end up contributing more to the mutual fund.
Redemption fees can sometimes vary depending on time periods; 30 days, 90 days, 180 days, and one year are some of the most common redemption periods.
Under this system, which is known as sliding scale, the shorter the period, the less likely you are to pay a fee. For example, if a fund has a 30-day period for redemption fees, you could buy and sell without paying a redemption fee as long you held the fund for 30 days.
Some funds have flat-rate redemption fees, which means the same fee is applied, regardless of the holding period.