Introduction
When investing in mutual funds, you’re often given two options: Regular Plan and Direct Plan. Both give you access to the same mutual fund scheme, managed by the same fund manager. However, the way you invest — and what you pay for — differs.
Let’s break down how these two plans work, their key differences, and which one might suit your needs.
What is a Regular Mutual Fund Plan?
In a Regular Plan, you invest through an intermediary, such as a broker(such as InvestWorks), financial advisor, or distributor. These intermediaries receive a commission (paid by the fund house), which is built into the fund’s expense ratio.
Features of Regular Plans:
- Assisted investing: Advice, hand-holding, portfolio reviews
- Available through platforms, banks, or agents
- Higher Expense Ratio (includes distribution fee)
What is a Direct Mutual Fund Plan?
In a Direct Plan, you invest directly with the mutual fund house, without intermediaries. As a result, there are no commission charges, and the expense ratio is lower.
Features of Direct Plans:
- No intermediary = No commission
- Higher returns over the long term due to low costs
- Requires some DIY understanding or research
📈 Example: Return Comparison Over 10 Years
Imagine you invest ₹5 lakhs in both plans for 10 years in a fund giving a 12% annual return (before expense ratio).
🤔 Which One Should You Choose?
Choose Regular Plan if:
- You are new to mutual funds
- You need personalized advice or assistance.
- You prefer human support in goal planning.
Choose Direct Plan if:
- You are comfortable researching funds on your own
- You want to maximize returns and reduce costs.
- You already understand risk, asset classes, and fund types.
📌 Conclusion
There’s no one-size-fits-all. Both direct and regular plans serve different types of investors. The key is to align your choice with your knowledge level, support needs, and cost sensitivity.
Pro Tip from InvestWorks:
We believe in empowering investors through financial education. Even if you start with a regular plan, you can switch to direct once you’re confident. Or let us help you build a hybrid strategy that fits your needs.
While direct plans offer lower costs, the value of expert guidance can far outweigh the savings in fees, especially when markets are volatile or when your goals are complex.
At InvestWorks, we don’t just distribute funds — we help you build wealth strategically. From risk profiling and fund selection to regular portfolio reviews and tax-efficient planning, our insights have helped clients consistently achieve 12–18% returns, often beating passive investors who go the direct route.
If you’re someone who values expert support, market-timed strategies, and goal-based investing, a regular plan with InvestWorks might just give you the best of both worlds — peace of mind and strong performance.