Choosing between direct and regular mutual funds is an important decision for investors. Both invest in the same assets, but they differ in costs and returns. Understanding these differences is essential for making an informed investment choice. Learn their differences and pros and cons to determine which option best aligns with your financial goals.
What is Direct Mutual FundsÂ
When you invest in direct mutual funds, you only interact with the mutual fund house without involving brokers or advisors, thereby avoiding distribution commissions. This reduction in costs makes direct plans more cost-effective compared to regular plans. The expense ratio, which is the fee charged for managing the fund, is lower in direct mutual funds, allowing you to earn higher returns over time.Â
