Growth vs IDCW Options

Besides Direct/Regular, every fund also offers Growth and IDCW (Income Distribution cum Capital Withdrawal) options.

Growth Option

No payouts — all gains stay invested
NAV keeps growing as the fund earns returns
You only realize gains when you sell
Tax advantage — no tax until you sell

IDCW Option (Formerly "Dividend")

Periodic payouts to your bank account (quarterly, monthly, etc.)
SEBI renamed it from "Dividend" to IDCW because it's NOT a dividend — it's your own money being returned
After payout, NAV drops by the payout amount
Tax disadvantage — payouts are taxed as income in the year received

Why IDCW is Misleading

If a fund with NAV ₹100 declares ₹5 IDCW:

NAV drops to ₹95
You get ₹5 in your bank
Net value: still ₹100 — nothing was "earned"

It's like withdrawing ₹5 from your own savings account and calling it "income."

When to Choose What

Choose Growth If	Choose IDCW If
You're building wealth long-term	You need regular income (retired)
You don't need periodic cash flows	You want forced discipline to take some money out
You want tax efficiency	You're in a low tax bracket

For 95% of investors, Growth is the better choice. Let compounding work uninterrupted.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not indicative of future returns.