Check whether your mutual fund plan says “Direct” or “Regular”. It affects the cost of investing.
What the Terms Say
Both plans of the same scheme have the same portfolio and fund manager. The regular plan includes distribution costs, including the distributor's commission. The direct plan has lower ongoing expenses because those costs are left out.
The expenses are taken from the fund and reflected in its value. You don't get a separate annual bill for them.
Why It Matters
A small yearly cost difference can add up over time. A direct plan still has the same investment risks. Advice or platform services may cost extra. With a regular plan, check what support the distributor provides.
A Simple Example
Suppose yearly expenses are 1.5% for the regular plan and 0.8% for the direct plan. On a value of ₹1 lakh throughout the year, the difference is roughly ₹700. Actual costs depend on the changing investment value.
Check Before You Agree
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Confirm the plan type and current expenses.
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Ask about separate advice or platform fees.
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Before switching, check exit charges and tax. Switching plans generally involves selling your old units and buying new ones.
Quick Takeaway
Know the cost of your plan and the support you receive.