Question

What is the TER difference between a Regular Plan and Direct Plan of the same scheme?

Accepted Answer

Regular Plan has a higher TER due to distributor commission included; Direct Plan has lower TER as no commission is paid — the difference typically ranges from 0.5% to 1.5% — The Regular Plan TER includes distributor trail commission (typically 0.5%–1.5% for equity funds). The Direct Plan excludes this commission, resulting in a lower TER by the same amount. Over long periods, this 0.5%–1.5% annual difference compounding results in significantly higher NAV for Direct Plan investors — making Direct Plan meaningfully better for cost-conscious long-term investors.