Glossary
Direct plan and regular plan: meaning, example and why it matters
Two versions of the same mutual fund scheme. A direct plan is bought straight from the fund house and has a lower expense ratio because no distributor commission is paid; a regular plan is bought through an intermediary.
Worked example
If a regular plan has an expense ratio of 1.5% and the direct plan of the same fund has 0.7%, the 0.8 percentage-point gap on ₹1,00,000 is about ₹800 a year in costs, before the effect of compounding.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
Both plans hold the same portfolio. Only the cost differs, so the plan you hold changes how much of the fund's return you keep.
Related terms
See it in practice
Frequently asked questions
Do direct and regular plans hold different stocks?
No. They invest in the same portfolio. Regular plans include distributor commission in the expense ratio and direct plans do not.
Is this page investment advice?
No. Direct plan and regular plan is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.