Regular Plan — Mutual Fund Term Explained

Mutual fund units purchased through a distributor who earns a commission. Higher expense ratio than direct plans.

Regular plans have a higher expense ratio because the AMC pays trail commission to the distributor. For investors who need ongoing advice and financial planning, the extra cost may be justified.

Investors comfortable managing their own investments should prefer direct plans.

Related terms

• Direct Plan — Mutual fund units purchased directly from the AMC without a distributor. No commission paid, so expense ratio is 0.5-1% lower than regular plans.
• Expense Ratio — The annual fee charged by a mutual fund as a % of AUM. Covers management fees, operational costs and commissions. Deducted daily from NAV.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.