Direct vs Regular Plans
The same fund, two prices. Why the direct plan can leave you lakhs richer.
Every mutual fundA pooled investment managed for many investors at once. offers two versions of the SAME portfolio: a Regular plan and a Direct plan. Same stocks, same manager, same strategy — but different cost.
- Regular plan — you invest via a distributor/agent who earns a commission, baked into a higher expense ratioThe annual fee a fund charges, as a % of your money..
- Direct plan — you invest directly with the fund house (no middleman), so the expense ratioThe annual fee a fund charges, as a % of your money. is lower (often by ~0.5–1%).
Direct and Regular are identical investments at two prices — and you keep the difference forever. That ~0.75% annual saving, compounded over decades, can mean lakhs of extra rupees for doing nothing but choosing “Direct.” If you can pick funds yourself (this academy helps), always choose Direct.
Common mistakeStaying in Regular plans by default (or because an agent “helps”). Unless you genuinely value and need advice, you’re paying a recurring commission for the same fund you could buy direct.
Key takeawayDirect and Regular plans are the same fund; Direct cuts out the distributor commission, lowering cost ~0.5–1%/yr — worth lakhs over time. Default to Direct if self-investing.
FAQs
How do I buy a direct plan?
Through the fund house’s own website/app, or platforms that explicitly offer “direct” plans (many do, often free). Check the plan name says “Direct” — if it says “Regular,” you’re paying the commission.