Published: 21st Nov 2024
By: Value Research
Unlike regular plans, direct plans of mutual funds let you invest directly with the fund house or mutual fund company, cutting out the intermediaries. Same fund, same manager, just a different way to buy. How does this benefit you? Swipe to know.
Direct plans charge a lower expense ratio since they skip distributor commissions. As of October 2024, the average difference between the expense ratio of a 'regular' and a 'direct' plan of a flexi-cap fund is 1.25 per cent.
Savings on commissions get added directly to your returns. Over time, this seemingly small difference gets compounded and boosts your returns significantly. A Rs 5,000 monthly SIP in direct funds could give you as much as Rs 42.5 lakh more than regular funds over 30 years!
With direct funds, you invest on your own terms. You can research, choose, and manage your investments directly without the need for an intermediary.
While direct funds save costs and provide higher return potential, if you are not a DIY investor and need assistance and help understanding where to invest, take the help of a distributor and invest in a regular plan.
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