Plans and options
What is a direct plan?
A direct plan is the version of a scheme bought straight from the fund house or a platform without a distributor. It has a lower expense ratio because no distributor commission is paid.
How it works
Every scheme has a direct plan and a regular plan. They hold the same portfolio and are run by the same manager; only the expenses, and therefore the NAVs, differ.
With a direct plan you choose, track and review your funds yourself, or pay a SEBI-registered investment adviser separately for advice.
Example
If a scheme's regular plan has a TER of 1.6% and its direct plan 0.8%, the direct plan's NAV grows about 0.8 percentage points a year faster, before any other difference.
Keep in mind
- A distributor cannot sell you a direct plan.
- Compare the two plans of the same scheme by their TER and NAV history.
Questions people ask
Is a direct plan a different fund?
No. It is the same scheme and portfolio with a lower expense ratio.
Can I move from regular to direct?
Yes, by switching or redeeming and reinvesting, which counts as a sale for tax and exit load.
Related terms
General information for education, not investment advice or a recommendation of any scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future. Last reviewed 25 October 2026.