Glossary· Costs & scheme terms
What is Direct vs Regular plan?
The same portfolio, sold with or without distributor commission built in.
Regular plans embed a trail commission in the expense ratio, typically 0.5–1% a year; Direct plans don't, so their NAV grows faster. Only ever compare Direct against Direct — putting a Regular plan next to a Direct one measures the commission, not the manager.
For the formula and the constants behind this figure, see Methodology.
Guides that use Direct vs Regular plan
13 guides put this term to work.
- Direct vs Regular plans: how a commission you never see costs you lakhsThe same scheme, the same portfolio, two different NAVs — and a trail commission deducted before the NAV is struck. What the gap compounds to over twenty years.
- How mutual fund investing actually works: follow the money, liveInteractive diagrams of the whole pipeline — the route one ₹10,000 SIP takes through your platform, clearing, the AMC, the RTA and the custodian, and what each is allowed to touch.
- Exit load and expense ratio: the hidden costs of investingThe expense ratio split into three parts from April 2026, the caps that now apply, the charges that sit outside it — and why one percentage point can cost more than the principal.
- The twelve mistakes that cost first-time SIP investors the mostAlmost none of the money new investors lose goes to bad funds. It goes to plan, cost, horizon and behaviour — and every one of these is avoidable by someone who was warned.
- How to clean up a portfolio with too many schemesFour moves in strict order: see everything, label every holding, stop the inflows, then unwind slowly across financial years using the annual exemption.
- Demat or Statement of Account: which holding mode?The units are identical; only the recordkeeping differs. One is free and keeps Direct plans simplest, the other consolidates everything into a single transmission process.
- Moving your funds from one platform to anotherYour platform does not hold your units, so changing apps usually transfers nothing. The distinction that costs money is a Regular-to-Direct switch, which is a redemption.
- How SEBI's rules actually protect a retail investorThe structural protections, the conduct rules and the safety nets — and the more useful half: an explicit list of what none of it protects you from.
- Analysis paralysis: how to stop researching and startThe gap between a good fund and the best fund is small; the gap between investing and researching is enormous. The one-hour version that gets you started.
- Finfluencers: separating a useful explainer from a paid tipAdvice and return claims are regulated activities. The one question that resolves nearly everything — who pays this person — plus the reliable warning signs.
- Your annual portfolio audit: a step-by-step health checkNinety minutes, once a year, in six parts — where the default action at every step is to do nothing, because the audit exists to catch drift rather than generate trades.
- AMC apps vs third-party platforms: where should you invest?The route matters far less than the plan. A 'free' platform selling Regular plans is paid through the expense ratio you pay daily.
- Thirty years back, thirty years ahead: how Indian funds evolvedNearly every protection you rely on exists because something failed. Which incident produced which rule, and what is likely, uncertain and unlikely next.
More on costs & scheme terms
What you pay, and the rules attached to buying and selling units.
- Expense ratio
- The fund's annual running cost, as a percentage of assets.
- Growth vs IDCW option
- Whether gains stay invested or get paid out.
- Exit load
- A fee charged when you redeem within a stated period.
- Lock-in
- A period in which units cannot be redeemed at all.
- Stamp duty
- A flat 0.005% government levy on every mutual fund purchase.
- Minimum SIP / lumpsum
- The smallest instalment and the smallest one-time amount the scheme accepts.
- NFO
- A scheme's initial subscription window, before it starts trading.