Direct vs Regular Plans

Factory outlet vs retail store

Buying Direct is like buying from the factory outlet — same product, no middleman markup. Regular is like buying from a retail store that adds a margin. Over time, that small markup adds up to lakhs.

Every mutual fund scheme in India comes in two plans: Direct and Regular. They invest in the exact same portfolio — the only difference is the expense ratio.

Direct vs Regular

Direct Plan

+ No distributor commission
+ Lower expense ratio (e.g., 0.5%)
+ Higher NAV — more money stays invested
+ Higher returns over time

Regular Plan

- Distributor gets 0.5-1.5% p.a. commission
- Higher expense ratio (e.g., 1.5%)
- Lower NAV — commission deducted daily
- Lower returns over time

How Commission Works

When you invest through a distributor (bank, app that sells Regular plans, financial advisor), they earn a trailing commission every year — typically 0.5% to 1.5% of your investment. This is baked into the expense ratio, reducing your NAV growth every day.

The Compounding Impact — ₹10,000/month SIP at 12% gross return

After 10 years: Direct ₹23.2L vs Regular ₹22.0L — you lose ₹1.2L. After 20 years: Direct ₹99.9L vs Regular ₹89.2L — you lose ₹10.7L. After 30 years: Direct ₹3.53 Cr vs Regular ₹2.82 Cr — you lose ₹71.1 lakh to commission on just ₹10,000/month.

Don't Ignore This

Over 30 years, the 1% commission difference costs you ₹71 lakh on a ₹10,000/month SIP. Always choose Direct plans unless you truly need advisory services.

Your Next Step

Use our Expense Ratio Calculator to see exactly how much you'd save by switching to Direct.