Direct vs Regular Mutual Funds

There are multiple investment options available in the market, and mutual funds stand out as a popular choice for many. Mutual Funds are further available in two forms: Direct and Regular. Understanding the difference between direct vs regular mutual funds helps you invest as per your goals and earn profits.

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What are Direct Mutual Funds?

Direct mutual funds, as the name suggests, are purchased directly from the Asset Management Company (AMC) or fund house. This means there's no intermediary, such as a distributor, broker, or financial advisor, involved in the transaction. When you invest in a direct plan, you are dealing directly with the fund house, typically through their website, app, or physical branches.

What are Regular Mutual Funds?

Regular mutual funds, conversely, are purchased through an intermediary. These intermediaries could be financial advisors, mutual fund distributors, banks, or online platforms that offer investment plans or services. The role of these intermediaries is to assist investors in selecting suitable funds, and providing ongoing support and advice.

  • Insurance Companies
  • Mutual Funds
Returns
Fund Name 5 Years 7 Years 10 Years
Equity Fund SBI Life
Rating
16.25% 13.57%
11.8%
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Opportunities Fund HDFC Life
Rating
21.77% 16.47%
14.44%
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High Growth Fund Axis Max Life
Rating
29.3% 22.69%
17.8%
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Pension India Consumption Fund ICICI Prudential Life
Rating
20.5% -
15.5%
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Multi Cap Fund Tata AIA Life
Rating
25.78% 22.75%
20.5%
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Accelerator Mid-Cap Fund II Bajaj Life
Rating
20.48% 14.35%
14.46%
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Multiplier Birla Sun Life
Rating
22.64% 16.72%
15.51%
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Virtue II PNB MetLife
Rating
20.17% 17.55%
15.03%
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Equity II Fund Canara HSBC Life
Rating
15.98% 12%
10.67%
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US Equity Fund Star Union Dai-ichi Life
Rating
14.69% -
13.87%
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Fund rating powered by
Last updated:
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  Returns
Fund Name 3 Years 5 Years 10 Years
Active Fund QUANT 23.92% 31.48%
21.87%
Flexi Cap Fund PARAG PARIKH 20.69% 26.41%
19.28%
Large and Mid-Cap Fund EDELWEISS 22.34% 24.29%
17.94%
Equity Opportunities Fund KOTAK 24.64% 25.01%
19.45%
Large and Midcap Fund MIRAE ASSET 19.74% 24.32%
22.50%
Flexi Cap Fund PGIM INDIA 14.75% 23.39%
-
Flexi Cap Fund DSP 18.41% 22.33%
16.91%
Emerging Equities Fund CANARA ROBECO 20.05% 21.80%
15.92%
Focused fund SUNDARAM 18.27% 18.22%
16.55%

Last updated: August 2025

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Difference Between Regular and Direct Mutual Funds

The key differences between direct vs regular mutual funds are: 

Feature Direct Mutual Funds Regular Mutual Funds
Distribution Directly from the AMC (fund house) Through intermediaries (distributors, advisors, banks)
Expense Ratio Lower (no distribution commission) Higher (includes commission for intermediaries)
Returns Potentially higher (due to lower expense ratio) Comparatively lower (due to higher expense ratio)
Advice/Support No direct advice from the AMC; self-research required Access to advice, research, and support from an intermediary
Suitability For informed investors comfortable with self-research For investors seeking guidance and convenience
Transaction Online platforms of AMCs, specific direct fund apps Through intermediary platforms, agents

Choosing Between a Regular and Direct Mutual Fund

The choice between a direct and regular SIP mutual fund ultimately depends on an individual's financial literacy, comfort with self-management, and desire for professional guidance.

Who Should Choose Direct Mutual Funds?

  • Investors who understand mutual funds and market dynamics.

  • Those who prefer to research and make independent investment decisions.

  • Individuals aiming to maximize returns by minimizing fees.

  • Long-term investors who benefit most from cost savings over time.

Who Should Choose Regular Mutual Funds?

  • New investors who need guidance on schemes, risks, and market volatility.

  • Those who prefer professional advice for portfolio rebalancing.

  • Individuals lacking time to research and monitor their investments.

  • Investors who appreciate intermediaries handling paperwork and updates.

Conclusion

The key differentiator between direct vs. regular mutual funds lies in the expense ratio and the presence or absence of an intermediary. Whether you opt for direct mutual funds or regular mutual funds, remember to align your investment decisions with your financial goals and risk appetite.

FAQs

  • What's the core difference in direct vs regular mutual funds?

    Direct funds have lower fees (no commission); regular funds include intermediary fees.
  • Why might direct mutual funds give more return?

    Lower expense ratios in direct funds mean more of your money grows.
  • Who are direct mutual funds for?

    Direct mutual funds are for investors who are comfortable self-managing their investments.
  • Who should pick regular mutual funds?

    New or busy investors who need advice and support from an expert.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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