Difference between direct plan and regular plan of mutual funds

1. Direct plans are directly offered by the fund houses whereas regular plans are bought through intermediaries or distributors like Independent financial advisers, banks or NBFCs.

2. Direct plans have no commissions and brokerage whereas for regular plans, commission or brokerage is paid to the intermediaries.

3. Expense ratio of a direct plan is lower as there is no commission involved. For a regular plan it is higher since there are commissions to pay.


4. NAV is higher in a direct plan as compared to a regular plan.

5. The return of direct plans are higher due to a lower expense ratio as compared to the regular plans.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)