A direct mutual fund plan is the same scheme bought straight from the fund house, with no distributor commission built into its cost. Every mutual fund you invest in on Rupeezy — Lumpsum, SIP, or NFO — is a direct plan.
What's the difference between a direct and a regular plan of the same fund?
A fund house sells every scheme in two plans: direct, bought straight from the AMC with no distributor involved, and regular, bought through a distributor who earns a commission for referring you. Both plans hold the exact same portfolio, run under the exact same fund manager, and follow the exact same strategy — the only difference is whether a distributor's commission is built into what you pay. That cost shows up in the plan's expense ratio: a regular plan's is higher because it has to cover the commission; a direct plan's is lower because it doesn't.
Does the lower expense ratio actually change my returns?
Yes. Expense ratio is deducted from a fund's NAV every day, so a direct plan's NAV compounds slightly faster over time than the same scheme's regular-plan NAV — same portfolio, same market performance, just less cost taken out along the way. See Why is the NAV for direct mutual funds higher than regular mutual funds? for the NAV-level comparison.
Do I invest in direct plans or regular plans on Rupeezy?
Direct. Every mutual fund you buy on Rupeezy is the fund's direct plan, so you never pay a distributor commission on it. See What are the advantages of investing in mutual funds on Rupeezy? and What are the charges for investing in mutual funds on Rupeezy? for what that means for your cost and returns overall.
Things to keep in mind
- A direct plan isn't a different fund or a different strategy — it's the same scheme, same fund manager, same holdings as the regular plan, just without the distributor's commission built in.
- Expense ratio still applies to a direct plan; it's lower than the regular plan's, not zero.