Direct plan

The version of an Indian mutual fund scheme bought straight from the fund house, with no distributor commission built into its costs. Every scheme has offered one since January 2013, alongside a regular plan whose higher expense ratio pays the distributor.

Both plans hold the same portfolio and differ only in cost, often by 0.5 to 1 percentage point a year for an equity fund. Over long periods that compounds. Take ₹10 lakh growing at 12% a year for twenty years. It becomes ₹96.5 lakh. At 11% it becomes ₹80.6 lakh, so one point a year costs you ₹15.8 lakh. That's a lot to pay for a line in the fee table.

Regular plans buy advice, and advice can be worth more than it costs to someone who would otherwise sell in a panic. You should know that you are paying that price, and for what.

Same portfolio, different cost.