You finally decide to invest in mutual funds (great step!), and suddenly you hit your first roadblock: Direct vs Regular Mutual Funds – what’s the difference?
Should I go with a Direct Plan or a Regular Plan?
If you are confused between these two options, you’re not alone. Many investors, even experienced ones, start with Regular plans just because they seem simpler. But here’s the truth, The option you choose today can make a massive difference in your returns tomorrow.
In this blog, we’ll break it down Direct vs Regular Mutual Funds in simple, so by the end, you’ll confidently know which option fits you best.
Table of Contents
What Are Direct and Regular Mutual Funds?
Both Direct vs Regular Mutual Funds plans are just two ways of buying the same mutual fund. The mutual fund scheme, portfolio and same fund manager – everything stays the same.
So what’s different?
Direct Plan
- You invest directly with the fund house (like HDFC Mutual Fund, ICICI Prudential, etc.)
- No middleman, no commissions
- Lower expense ratio = higher returns
Regular Plan
- You invest through an agent, broker, or third-party platform
- The fund house pays a commission to the middleman
- Higher expense ratio = slightly lower returns
Also Read: SIP vs Lumpsum Investment: Which Mutual Fund Strategy is Best for You?
Difference between Direct and Regular mutual funds
Both Direct and Regular mutual fund plans invest in the same portfolio, managed by the same fund manager, and follow the same strategy for both plan, So, what’s different? Direct vs Regular Mutual Funds Read the below table to get clear idea.
| Feature | Direct Plan | Regular Plan |
| Bought through | Fund house website/app | Broker, advisor, bank |
| Commission | No commission | Includes distributor commission |
| Expense Ratio | Lower | Higher |
| Returns | Slightly higher | Lower |
| Advice/Assistance | DIY (do-it-yourself) | Handholding via agent |
In short: A Regular plan is like buying from a middleman (and paying for it), while a Direct plan is buying directly from the source-saving money every year.
Example, Why 1-1.5 % Matters More
Suppose you invest ₹10 lakh for 20 years in an equity fund that delivers 12 % gross every year. Mutual fund types explained
| Plan | Total Expense Ratio | Net Return p.a. | Value After 20 yrs |
| Regular | 1.75 % | 10.25 % | ₹70.1 lakh |
| Direct | 0.75 % | 11.25 % | ₹82.2 lakh |
That ₹1 lakh gap in fees turned into ₹12 lakh extra in your pocket…
That’s the power of saving even 1% every year. Small change, big impact.
Also Read: Mutual Funds vs Stocks: Which Is Better for You and Why?
Why Smart Investors Choose Direct Plans
If you’re comfortable using apps or websites, Direct plans are a game changer.
Here’s why:
- No hidden commissions
- Higher long-term returns
- Full control of your portfolio
- Transparency
You can start investing in Direct mutual funds easily through trusted platforms like: Zerodha Coin, Groww, Direct from fund house websites (like sbiimf, hdfcfund)
These platforms make it beginner friendly, paperless account opening, and smooth user experience.
Why Some Still Prefer Regular Plans
Your bank RM or financial advisor says, “Sir, we’ll handle everything. Just sign here.” So you sign up without knowing you’re being charged every year.
Many people don’t even know they’re in a Regular plan, let alone what a Direct plan is.
Some People prefer Regular plans because:
- They get help from an agent or advisor
- Everything is done-for-you: KYC, selection, SIP setup
- They feel more “secure” having someone to talk to
Can I Switch from Regular to Direct Plan?
Yes! You can. And it’s easy.
Here’s how:
- Redeem your Regular plan units (check exit load & tax implications)
- Reinvest the amount in the Direct plan of the same scheme
- Alternatively, use platforms like Groww, Zerodha Coin that help in Regular-to-Direct switches
Note: No exit load applies for equity funds older than one year, Taxation = regular redemption rules.
My Personal View Direct vs Regular Mutual Funds
When I started investing in mutual funds, I had no idea what Direct or Regular meant. My advisor “helped” me and I trusted him. Years later, I found out I was losing lakhs in commission.
That day, I made the switch. Yes, After once I learned how easy it is to invest directly, I felt more in control of my finances.
I wish someone had explained this to me earlier. That’s why I wrote this article Mutual fund types explained so you don’t make the same mistake.
Alos Read: How to Analyse a Mutual Fund Before Investing 10-Points Checklist
Final Words
“A wise investor doesn’t just look at returns, he looks at costs too.”
Choosing between Direct and Regular mutual funds isn’t just about saving 1%. It’s all about taking charge of your money and making smarter financial decisions.
Your financial journey is your own. You don’t need to be an expert you just need to stay curious, keep learning, and avoid paying for things you don’t need.
So… Direct vs Regular?
Take five minutes today, log in to your portfolio, and check the plan type.
Choose what matches your comfort, confidence, and commitment. But remember the less you pay in commissions, the more your wealth grows.
Thanks for visiting Abhishek Rodi’s site. Your journey to financial freedom starts here!
View Article by AMFI: What is a Direct Plan / Regular Plan?