Mutual Fund Basics: Direct vs. Regular Plans

Ratin Biswass / 10 Jul 2025/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund

I am a new investor keen to learn more about mutual funds and start investing.

I'm a new investor keen to learn more about mutual funds and start investing. Could you please help me understand the difference between direct plans and regular plans in mutual funds? - Sourabh Dhere [EasyDNNnews:PaidContentStart]

Editor Responds : When investing in mutual funds, you can choose between a Direct Plan and a Regular Plan. The primary difference lies in how you invest and the cost involved. A Direct Plan allows you to invest directly with the mutual fund company, without any intermediaries. As there are no distributor commissions involved, the expense ratio (annual fees) is lower. Over the long term, this can lead to higher returns for investors. In contrast, a Regular Plan is routed through a distributor or advisor who may assist you in choosing suitable schemes. However, the fund house pays them a commission, which is built into the expense ratio, making it slightly higher than Direct Plans. For investors who are confident in making their own investment decisions, Direct Plans offer a costeffective route. Those who need guidance may prefer Regular Plans despite the slightly higher cost.

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