Every mutual fund scheme has a direct plan and a regular plan. Both hold exactly the same investments. The regular plan includes a commission paid to the distributor, so its expense ratio is higher and its returns are lower.
What the difference adds up to#
| Plan | Return after costs | Value after 15 years |
|---|---|---|
| Lower-cost plan | 11.5% a year | ₹51,18,268 |
| Higher-cost plan | 10.5% a year | ₹44,71,304 |
| Difference | 1 percentage point | ₹6,46,964 |
Fund houses publish each plan's expense ratio on their websites, and you can compare them before investing.