Direct vs regular mutual funds: What's right for you?

Summary: Regular or direct, which one should mutual fund investors choose? While one is cheaper, the other one feels easier. However, the choice you make today will have a significant impact on how much you earn. Here, we compare both types of plans and tell which one suits you best. “Should I go regular or direct?” is a question that leaves many mutual fund investors confused. Though most are aware that direct plans of mutual funds are cheaper, very few realise how that minuscule 1 per cent difference in costs today can materially impact the final corpus in the long run. That’s why making the choice between direct and regular plans deserves more attention and thought than it usually gets. And so, we decided to compare direct and regular funds to determine which is right for most investors. Why do direct and regular plans exist in the first place? There’s a simple reason why there are two types of plans for the same mutual fund scheme: whether an intermediary or a distributor exists. Direct plans are purchased from the fund house or via an online platform without a distributor. Regular plans, on the other hand, are bought through a distributor or a mutual fund advisor. In a regular plan, the distributor earns a commission that is paid by the fund house. This commission is not charged separately to the investor. Instead, it is included in the scheme’s expense ratio, which is the annual fee charged to manage the fund. As a result, regular plans have a higher expense ratio than direct plans, even though both invest in the

This article was originally published on February 06, 2026.