When you buy something, you will always try to cut expenses. Suppose if we buy any product online, you prefer to have free delivery. Why you do that? In order to reduce costs, you’ll try to cut the additional expenses which you don’t want to incur. Here, you do the same with the Mutual Funds.
In the market, we can buy Mutual funds in 2 ways:
- Directly from Asset Management Company (AMC) – Direct Plan
- We choose to buy through an intermediary – Regular Plan
In Regular plan, you buy mutual funds through an intermediary such as brokers, distributors or advisors. And these agents will charge a commission for the services they provide where your expenses on investments will be high. As you know that these brokers will never sell you the products that you need. They always try to push the schemes which earn a good profit to them.
Now let’s look at Direct Plans. Direct Plan is a new regulation which is enforced by SEBI on January 1, 2013. In the Direct Plan, as an investor, you can directly buy the mutual funds from the Asset Management Company (AMC), where there will be no involvement of any brokers or intermediaries and these funds which you buy are commission free.
The great advantage of Direct Plans is that NAV (Net Asset Value i.e., the value per share) is more when compared to Regular Plan which means that you earn more on your investments.
For example, if you invest Rs 10 lakhs in both the Direct Plan and Regular Plan. The direct plan offers 17- 19% of returns whereas the Regular Plan offers 14-15% of returns. Thus, With Direct Plans you can earn 1-15% more returns than Regular Plans.
And here you have a platform to make an investment in Direct Plan- Fisdom with zero commission and zero fees. Fisdom offers you a wide range of funds and helps you to choose the right one that suits your investment needs. To look into more features of Fisdom – download the app, complete KYC and get access to top recommended funds.
How to decide on Direct plan and Regular Plan?
- If you already have an experience of investing in mutual funds, it is recommendable to go for Direct Plan, since you will have enough knowledge on mutual funds.
- If you are a beginner then you can opt for Regular Plan and it is recommendable that you can switch to Direct Plan once you gain knowledge and experience in investing.
So don’t miss out on those 1.5% extra return. Choose Fisdom and begin your journey to fulfill your dreams.
You are unique and so is your Investment!
