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A Direct plan is what you buy directly from the mutual fund company (usually from their own website). Whereas a Regular plan is what you buy through an advisor, broker, or distributor (intermediary). In a regular plan, the mutual fund company pays a commission to the intermediary. This is then recovered as an expense from the plan. In mutual funds speak, the expense ratio is higher for a regular plan. Read along to understand Regular Vs Direct Mutual Funds in detail.

regular vs direct mutual fund
regular vs direct mutual fund

What are Direct Mutual Funds?

Direct Mutual Fund is the type of mutual fund that is directly offered by the AMC or fund house. In other words, there is no involvement of third party agents – brokers or distributors. Since there are no third party agents involved, there are no commissions and brokerage. Hence the expense ratio of a direct mutual fund is lower. Thus, the return is higher due to a lower expense ratio. The direct plan of a mutual fund can be easily identified; the word ‘Direct’ is prefixed in the name of the fund. These mutual funds can be bought through either online or offline mode.

What are Regular Mutual Funds?

Regular plans are those mutual fund plans that are bought through an intermediary. These intermediaries can be brokers, advisors, or distributors. The intermediaries charge the fund house a certain fee for selling their mutual funds. The AMCs usually recover this fee through expense ratio. The expense ratio for regular mutual funds is slightly higher than direct mutual funds. Hence the returns tend to be a little higher for direct plans. A regular plan best suits investors who do not have the knowledge about the market nor the time to monitor their portfolio. Therefore, a regular plan is far more convenient for investors who aren’t well informed about the market. They receive expert advice at a nominal fee.

What is the difference between Direct and Regular mutual fund?

In 2012, SEBI introduced the direct plans in Mutual Funds. This was to enable investors to buy mutual funds without any intermediary in between. Both the options – direct plan and regular plan are managed by the same mutual fund manager. They invest in the same assets as well. However, the major difference is that in a regular plan, the fund house pays commission as a distribution fee. While in the direct plan, there is no such commission or fee.

Below is the table showing the major differences for regular plan vs direct plan

ParameterDirect PlanRegular Plan
Third-PartyNot PresentPresent
ReturnsHigh (no additional fees to broker/agent)Low
Expense RatioLow expense ratio (no additional fees to broker/agent)High expense ratio
Market ResearchDone by SelfDone by advisor
Investment AdviceNot AvailableProvided by advisor

From the above Regular vs Direct mutual funds comparison, regular mutual funds are best suited for investors who seek financial advice. Even though regular plans seem costly when compared to direct mutual funds. The small percentage of the additional cost is worth the right investment decision. Therefore, compared to an uninformed wrong decision, well-researched advice can earn higher value.

What are the advantages of Regular Plan over Direct plan in Mutual Funds?

While regular mutual funds have a slightly higher expense ratio and marginally lower returns, they have quite a few advantages.


Investing in a mutual fund isn’t as easy as it looks. An investor has to assess his profile on the basis of risk and financial needs. Then find the mutual fund that fits into this criteria. And finally, invest in the mutual fund. All this is a time taking process. An intermediary will have knowledge of the existing mutual funds. And will help find the best fit based on investors’ profiles. On the other hand, the direct plan lacks this. As a result, investing in a regular plan is convenient.

Professional advice

Intermediaries have in-depth knowledge of the huge array of mutual funds. Hence can assess an investor’s profile to find the best fit for them. A qualified advisor can guide the investors during their investment journey and even impart market knowledge to them to earn higher returns. So, only a regular plan has the option for professional advice. However, in a direct plan, the investor has to rely on his own knowledge.

Regular portfolio monitoring and review

Markets are dynamic and ever changing. As an investor, it would be hard to keep up with the market regularly. In a regular plan, intermediaries keep track of the market and monitor their client’s portfolios regularly. Also as needed, they advise on restructuring it. Investors opting for a direct plan have to take time out to monitor their portfolio regularly.

Value-added services

Intermediaries provide a few additional services for investors’ convenience. Such as keeping a record of investor’s investments, provide tax proofs during tax filing, facilitate redemptions, or etc. All these services aren’t available in direct plans. On the other hand, a regular plan comes with all these value added services.

Invest with Scripbox

Scripbox offers regular mutual funds investment via its online platform. It has a well-researched and tested algorithm that ranks mutual funds based on several parameters. It offers custom made portfolios for saving tax, for emergency purposes, and for building wealth. These portfolios are well researched and maximize returns for investors. Most importantly, Scripbox offers goal based investing so that investors can invest based on goals. One can either pick the goals that are already tailor made or build their own goal. Based on the goal and investor profile, Scripbox advises funds to achieve the goal.

Scripbox also offers a one stop solution for all mutual fund investment needs. Investing with it is easy and simple, and just a click away. They also make transacting with mutual funds and downloading the investment statements a stress-free task.


Regular vs direct mutual fund, which is better, isn’t the question here. Does it suit you or not? For an investment savvy investor who has the market knowledge, expertise, and time to arrive at the best mutual fund to invest, a direct mutual fund best suits him/her. Paying an advisor, the additional fee is not worth it as it doesn’t add any extra value. While most investors require investment assistance. For ones who seek such advice can invest in the best funds recommended by their advisor. The investment is then made in a regular plan. Scripbox is one such advisory platform. It provides its investors with an array of well-researched investment options.