In-Hand.in

← Back to Retireopedia

Direct vs Regular Plans

Background

Mutual funds in India offer two plan types: direct and regular. Direct plans are bought without distributor commissions, so they have lower expense ratios; regular plans include distributor commissions and cost more.

Explanation

Lower expense ratios in direct plans mean more of the fund’s return reaches you, which compounds significantly over decades. Regular plans may be convenient if you rely on distributor advice, but they permanently shave off a slice of your returns.

Example

If a direct plan charges 1% annually while the regular plan charges 2%, a ₹10,000 monthly SIP over 25 years can leave you with many lakhs more in the direct plan solely due to lower fees.

Try the planner

See how this concept fits your own retirement plan.

Retirement Planner | All Retireopedia terms