Key takeaways
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Regular plan pays a commission to your bank/distributor — from your returns✓
Direct plan has no middleman — all returns go to you✓
The expense ratio difference is 0.5%–1.5% per year✓
On ₹10,000/month SIP over 20 years: direct plan gives ₹17–₹25 lakh more✓
Use Kuvera, Coin by Zerodha, or MFCentral — all zero-commission direct platforms👨🔧
VinodAge 38·Engineer, Chennai
"
My bank relationship manager set up my mutual funds for me years ago. They must be fine.
Vinod has ₹8 lakh in mutual funds through his bank. Every fund is in the regular plan. He has been paying approximately ₹6,000–₹8,000 per year in hidden commissions since he started — which he has never seen deducted from his account.
💡
Why you never see the commission leave your account
The commission is NOT deducted from your bank account.
Instead, the AMC maintains two parallel versions of the same fund:
• Direct plan NAV: ₹54.72 (today)
• Regular plan NAV: ₹51.38 (today)
The NAV gap grows every year because the regular plan's NAV is dragged down by the commission paid out daily. You never see a deduction — but your returns are permanently lower.
₹10,000/month SIP for 20 years — direct vs regular
₹1070L
Direct plan (12.8% net return)
₹870L
Regular plan (11.5% net return)
₹ in lakhs. The ₹200 lakh difference = ₹20 lakh given to distributors over 20 years
Typical expense ratio gap: direct vs regular
✅
How to check if you are in direct or regular right now
Option 1: Look at your scheme name on any statement. Does it say 'Regular' or 'Reg'? → Regular plan. Does it say 'Direct' or 'Dir'? → Direct plan.
Option 2: Download your CAMS statement from camsonline.com (free, needs PAN). Every holding shows the plan type.
Option 3: Check your Zerodha Console or Kuvera portfolio — they show the plan type explicitly.
How to switch from regular to direct
1
Check capital gains before switching
Switching is a sell + rebuy, which triggers capital gains tax if you have profits. Calculate the tax first — especially if the fund has large unrealised gains.
2
Switch via AMC website directly
Log in to the AMC's website (HDFC Mutual Fund, Mirae, etc.), go to Switch option, and select the same fund in Direct plan.
3
Or redirect new investments
If tax impact is large: keep existing regular plan units and start new SIPs in direct plan only. Over time, the direct allocation will dominate.
4
All future investments: direct only
Use Kuvera.in or coin.zerodha.com for all new investments. They only offer direct plans — it's impossible to accidentally buy regular.
⚠Educational content only. Numbers shown are illustrative — actual returns vary. This is not investment advice. Consult a SEBI-registered financial advisor before investing.
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