This single choice — Direct or Regular plan — can make a difference of ₹10-20 Lakhs on a ₹10,000/month SIP over 20 years. Here's exactly what it means.
What is the Difference?
Regular Plan: You invest through a distributor/agent/broker. The AMC pays them a commission (0.5-1.5% per year) from your fund. This commission comes out of your returns.
Direct Plan: You invest directly with the AMC or through platforms like Groww, Zerodha, MF Central. No distributor commission. 100% of returns stay with you.
How Much Does it Really Cost?
0.5-1.5%Annual difference in returns
₹15-25LExtra wealth in 20 years (₹10K/mo SIP)
Example: ₹10,000/month SIP for 20 years:
- Regular Plan at 11%: ≈ ₹85 Lakhs
- Direct Plan at 12%: ≈ ₹1 Crore
- Difference: ₹15 Lakhs!
How to Invest in Direct Plans
- Groww App: All investments are in Direct Plans by default
- Zerodha Coin: Direct plans, ₹0 commission
- MF Central: AMFI's official platform, Direct plans
- AMC Website: Go directly to HDFC MF, SBI MF, etc.
💡 Already in Regular Plans? You can switch to Direct Plans via your existing platform or through MF Central. Note: Switching triggers capital gains tax. For long-term investors, tax cost of switching is usually recovered in 2-3 years through lower expenses.
When Regular Plan Might Make Sense
- You need hand-holding and personalized advice from an advisor
- Your advisor provides genuine ongoing financial planning (not just fund selling)
- You're likely to stop SIP without advisor follow-up accountability
Bottom line: If you can research funds yourself and use platforms like Groww or Zerodha, always choose Direct Plans. The savings compound dramatically over time.
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Disclaimer: This article is for educational purposes only. Not investment advice. Contact: myself@sipcalculators.in