Which is a better plan in mutual funds— direct plan or regular plan?
You need to first understand the different between the two. When you invest in the direct plan, you are dealing directly with the AMC, unlike a regular plan when you make the investment through an intermediary (distributor). The AMC pays the distributors a commission fee, which is deducted from your investments, effectively hurting the returns you can earn. In case of direct plans, your entire money is invested without incurring intermediary expenses, which, in turn, means there is a possibility to earn higher returns.
Purely based on returns, direct plans will always be better than regular plans of the same scheme. However, it is meant for those investors who can manage their investments on their own. For anyone dependent on the services of a distributor, including fund selection, the regular plans work better.
