Direct vs Regular Mutual Funds
Which One Should You Choose in 2025?
When investing in mutual funds, one of the first choices you must make is between a Direct Plan and a Regular Plan. While both options offer access to the same mutual fund schemes, the route you take impacts your returns, costs, and level of assistance.
This article breaks down the differences between direct and regular mutual funds and helps you decide which option best aligns with your investment goals.
🧾 What Are Direct and Regular Mutual Fund Plans?
| Plan Type | Purchased Through | Commission | Who Manages? |
|---|---|---|---|
| Direct | AMC website or direct platforms | ₹0 (No commission) | You manage yourself |
| Regular | Through an advisor/distributor | Commission included in expense ratio | Advisor assists |
✅ Key Differences Between Direct and Regular Mutual Funds
| Feature | Direct Plan | Regular Plan |
|---|---|---|
| Returns | Higher (no commission deducted) | Slightly lower (due to commission) |
| NAV | Higher NAV | Lower NAV |
| Expense Ratio | Low | High |
| Advice/Support | Not available | Distributor/Advisor support available |
| Platform | AMC websites, Direct Apps (Zerodha Coin, Kuvera) | Banks, MF Distributors, FinTech platforms |
| Best For | Informed investors | Beginners or those needing advice |
💰 How Do Returns Differ?
Here’s a quick example:
If you invest ₹1,00,000 in a mutual fund that gives 12% annual returns:
Direct Plan (expense ratio 1%): Effective return ≈ 11%
Regular Plan (expense ratio 2.25%): Effective return ≈ 9.75%
Over 10 years, this difference can result in ₹25,000–₹50,000 or more in gains!
🎯 When Should You Choose a Direct Plan?
Choose Direct Mutual Funds if:
You have basic financial knowledge
You’re confident in comparing and selecting funds
You want maximum returns by saving on commission
You use platforms like Zerodha Coin, Groww (Direct), Kuvera, or AMC websites
🧑💼 When Should You Go for a Regular Plan?
Choose Regular Mutual Funds if:
You need personalized guidance
You prefer handholding and portfolio advice
You are investing for the first time
You trust your financial advisor or distributor to guide you
📱 Platforms for Investing
| Direct Mutual Fund Platforms | Regular Mutual Fund Platforms |
|---|---|
| Zerodha Coin | ICICI Direct, HDFC Sec |
| Groww (Direct mode) | Banks (SBI, Axis, etc.) |
| AMC websites (e.g., SBI MF) | Offline MF agents |
| Kuvera, Paytm Money | Online distributors |
✅ Pros and Cons Summary
| Criteria | Direct Plan | Regular Plan |
|---|---|---|
| Pros | Low cost, higher returns, full control | Easy guidance, expert support |
| Cons | No support, DIY required | High cost, lower returns |
📈 Which Plan Should You Choose in 2025?
💡 If you are a self-learner, tech-savvy, and want to maximize returns – go Direct
💡 If you prefer expert guidance or lack time to manage investments – go Regular
You can even start with a regular plan, and switch to direct once you’re confident (note: exit loads and tax implications may apply).
🔖 Frequently Asked Questions (FAQs)
Q1. Can I switch from regular to direct mutual fund plan?
Yes, by redeeming units and reinvesting or through online platform transfers (subject to taxation and exit load).
Q2. Is there a risk difference between the two?
No, the underlying mutual fund is the same. Only cost and returns differ.
Q3. How much commission do advisors get in regular plans?
Generally, 0.5% to 1.5% annually, deducted from your returns via the expense ratio.
Q4. Which gives higher NAV – Direct or Regular?
Direct plans always have a higher NAV because they exclude distribution commission.
Q5. Can I invest in SIP through a direct plan?
Yes, SIPs are available in both direct and regular plans.
🧠 Final Thoughts
Both Direct and Regular Mutual Funds have their place in a smart investor’s toolkit. Your choice should depend on your financial knowledge, comfort with online tools, and need for personalized guidance.
👉 If you want to save costs and maximize returns — go Direct.
👉 If you want expert support and simplicity — go Regular.
Either way, mutual fund investing is a smart move toward long-term wealth creation.