Direct plan vs regular plan SIP — how much extra cost?
Regular is not a blessing from your distributor. It is a quiet annual cut you rarely invoice to yourself.
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The invoice you never receive
Direct vs regular is not a loyalty test for your cousin who “does finance.” It is an extra percent you gift him every year.
Regular plans pay a distributor trail. Direct plans do not. Same fund house, same stocks, different TER.
That is the actual question. Not the slogan on the brochure.
I keep seeing people in Nagpur argue this on family WhatsApp like it is a moral issue.
The spreadsheet is the easy half. The debit surviving April is the rest.
Half to one percent a year looks polite in a factsheet. Over 20 years on a SIP it becomes a room, a used car, or a year of fees.
If those two numbers already make you uncomfortable, believe them.
Nobody hands out a medal for pretending your Excel is braver than your salary.
Gap is the trail you never see billed.
Translate 1% TER into a kitchen number
Download one factsheet. Find TER direct and TER regular. Subtract. That gap is the price of the “free” advice.
Multiply mentally by 20 years of a growing SIP, not by one month. Humans cannot feel 0.8% until it is a lakh figure.
Open a calculator and type the ugly version first—₹10,000 SIP, 20 years: ~12% in direct near ₹1 crore versus ~11% net of extra trail near ₹87 lakh.
If the input only works in a good year, it is a wish, not a plan.
If you need a human, pay a fee-only planner and stay in direct. Or stay regular with eyes open. Do not mix myths.
If your regular-plan person actually stops you from panic selling, they earned something. If they only forward PDFs, they did not.
If you cannot explain the result to a slightly impatient parent, you do not understand it yet.
Loyalty arguments that cost lakhs
Thinking you cannot switch existing regular units to direct. You can, often as an extra step, sometimes with tax if you redeem.
Assuming direct is risky because it lacks a “relationship manager.” The RM does not sit under the NAV.
Chasing a new fund in regular because the cousin gets a kickoff gift. That gift is priced into your TER.
The internet will sell you a one-line rule. One-line rules do not pay EMIs.
Your cousin’s 2017 small-cap luck is not a policy.
A plan that never gets a yearly refresh is a framed poster.
In Nagpur the skipped review later becomes a complaint about luck. It was maintenance.
Planning sketch, same SIP, different net return.
Switch without a family court
Comfortable with apps and a yearly review: move new SIPs to direct this month.
Need a hand-holder: negotiate, or pay explicitly, and write down what you are paying.
Old regular units with huge LTCG: maybe leave them, start fresh SIPs in direct. Tax math first.
Clear the 16% fire, keep oats, then argue about this. That sequence is not optional.
Investing while revolving a 36% card is theatre.
Cut the size before you cut the habit. Habits are expensive to rebuild.
A smaller SIP or a shorter loan goal beats a heroic screenshot you cancel in six weeks.
₹10,000 for 20 years, two TERs
₹10,000 a month for 20 years at 12% sketches near ₹99–100 lakh. The same SIP at 11% after extra trail sketches near ₹87 lakh.
That ₹12–13 lakh is not a rounding error. It is a Nagpur down-payment gap.
₹15,000 SIP with 0.9% extra TER for 15 years still leaks roughly ₹6–8 lakh versus a tighter-TER twin.
None of this is a guaranteed NAV or a sanctioned loan. It is a map.
If the plan only works at 18% returns or a 6% home loan forever, it is not a plan.
Drop the return a couple of points and raise the EMI. If it breaks, you learned cheaply.
Keep a 10% haircut for tax, fees, or the extra month the builder delays.
Low advice-need plus app comfort = switch new SIPs.
Pay for advice if you need advice, not by default
Open the factsheet once. Circle the two TERs. Then choose a side on purpose.
A cousin’s Diwali sweet box is not a 20-year investment policy.
Boring consistency beats a dramatic restart every January.
Calendar reminder beats a quote about discipline.
If a friend in Nagpur asks the same thing next month, send them the calculator link, not a lecture.
And please date your spreadsheet. Future you will not remember which fantasy version this was.
Estimates only. Lender, CA, or advisor before you move real money.
Change the numbers in the calculator above and see the result on this page.
Estimates only—not personalised financial, tax, or investment advice. Markets, loan rates, and tax rules change. Confirm numbers with your lender, CA, or advisor before acting.