Direct vs Regular Mutual Fund Plans
Updated 26 Aug 2026
Every mutual fund scheme in India is sold in two versions. A regular plan pays a commission to the distributor who sold it; a direct plan, bought straight from the AMC or through certain platforms, pays no commission.
Same portfolio, different expense ratio
Both plans hold exactly the same securities and are run by the same manager. The only difference is cost: the commission is built into the regular plan's expense ratio, typically adding roughly 0.5% to 1% a year. That cost is deducted from NAV daily, so the direct plan's NAV pulls steadily ahead.
What the gap compounds to
A 0.75% annual cost difference sounds small. On ₹10 lakh growing at 12% for 20 years, it is the difference between roughly ₹96 lakh and ₹83 lakh — over ₹13 lakh, paid out of your return rather than the AMC's. Cost is the one variable in fund selection you can control with certainty.
Why this site ranks direct plans
We rank direct plans only. Listing both versions of every scheme would duplicate the entire universe, and the direct plan is the like-for-like performer that shows what the fund manager actually delivered.
Frequently asked questions
Is a direct plan always better than a regular plan?
Financially, a direct plan of the same scheme always has a lower expense ratio and therefore higher returns. A regular plan is only worth it if the distributor's advice genuinely adds more value than the commission costs you.
Can I switch from a regular plan to a direct plan?
Yes, but a switch is treated as a redemption and a fresh purchase, so it can trigger capital gains tax and any applicable exit load. Many investors leave existing units alone and simply direct new investments into the direct plan.