Every scheme has two plans with the same portfolio. The difference is the expense ratio, and the service that comes with it. Here is how to think about it.
Every mutual fund scheme in India is offered in two plans: a direct plan and a regular plan. Both invest in exactly the same portfolio, managed by the same fund manager. The only structural difference is the cost.
Where the difference comes from
A regular plan is bought through a mutual fund distributor. The AMC pays the distributor a commission, which is included in the regular plan’s total expense ratio (TER). So the regular plan’s TER is higher than the direct plan’s, and its NAV grows slightly slower over time.
A direct plan is bought straight from the AMC or through a platform that does not take distribution commission. There is no distributor in between, and also no one whose job it is to service your account.
What you get with a regular plan through us
- KYC checks, fresh KYC and modifications handled with you.
- Transactions placed and followed up until units are allotted.
- Bank mandates, nominations, address and contact changes done for you.
- Consolidated statements and capital-gains reports when you need them.
- Help for your family with transmission if something happens to you.
We are a mutual fund distributor, not an investment adviser. We are paid by AMCs through commission on regular plans. Our Commission Disclosure page explains this, and you can ask us for scheme-wise commission details at any time.
Which is right for you?
If you are comfortable doing your own paperwork, tracking mandates and handling service requests, a direct plan costs less. If you want someone to call when something goes wrong, a regular plan pays for that service. Either way, make the choice knowingly.
This article is for general information and education only. It is not investment, tax or legal advice, nor a recommendation of any scheme or product. Mutual fund investments are subject to market risks; read all scheme related documents carefully.
