Which is better in Direct Plan vs Regular Plan?

Direct Plan vs Regular Plan in Mutual Funds

When you choose a fund to invest in mutual funds, you see two options of the same plan. One of which is Regular Plans and the other is Direct Plans.

In this, you will know about the difference between these two, what are direct plans? Who are the direct plans best for? What are regular plans? Who are the regular plans best for? Transfer from Regular to Direct, How to identify Direct Plan and Regular Plan?

There is a difference in income by investing in Regular Plans and Direct Plans of any mutual fund.

Learn more about all these later.

 

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Direct vs regular mutual fund

Difference between Direct and Regular Plans in Mutual Funds

The plan is different in regular and direct mutual funds but the fund is the same.

Both the mutual fund plans are managed by the same fund manager.

The portfolios of both the funds are also similar.

The money of both the funds is also invested at the same place.

 

To understand the difference between direct and regular plans, go about it separately?

 

What are Direct Plans?

Direct Plans are called those in which there is no agent, broker, or mutual fund distributor between the investor and the mutual fund companies.

Regular plans were already running. But all the mutual fund companies have launched their direct plans from 1st January 2013 onwards in addition to regular plans.

Direct Plans by which the investor can buy mutual funds without any agent or mutual fund distributor.

No commission of any kind is given to anyone in the direct plan.

Due to which the expense ratio of the direct plan is less than the expense ratio of the regular plan.

That is, in Direct Plans, the savings are more due to the absence of commission of the agent.

 

Who are the direct plans best for?

If you have information about mutual funds, then select Direct Plans.

If you have time to look after the portfolio of the fund, then select Direct Plans.

In Direct Plans, you have to invest yourself by choosing mutual funds.

There is no role of advisor indirect plan. You have to manage yourself.

 

What are regular plans?

A regular plan is one in which an agent or a mutual fund distributor exists as a third party between the investor and the mutual fund company.

The mutual fund company pays commission to this agent. This money is not deducted separately but from our money invested in mutual funds.

 

Who are the regular plans best for?

If you do not know about mutual funds, then select the regular plan.

If you do not have time to manage and take care of your fund, then select the regular plan.

In the regular plan, the investor does not have to do anything.

 

Transfer from regular to direct

You can transfer your funds from regular to direct.

There is an exit load charge to be paid on transfer.

Exit load is the charge for premature exit from the fund.

In this, according to the time limit and money, there is no exit load with certain conditions.

 

How to identify Direct plans and Regular Plans?

If you have a question in your mind that how to know which plan the investor has invested in between regular and direct plans?

So it's easy to know.

It is written in the account statement/fund holding statement whether your mutual fund plan is regular or direct.

While taking the mutual fund plan, there is a direct plan or a regular plan written in it.

like:

SBI Bluechip Fund- Regular

SBI Bluechip Fund- Direct

 

We hope that you have got the information about Direct Plan vs Regular Plan.

In this, you have learned what are direct plans? Who are the direct plans best for? What are regular plans? Who are the regular plans best for? Transfer from Regular to Direct, How to identify Direct Plan and Regular Plan?

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