Direct vs Regular Mutual Fund Most mutual fund schemes come with two types of plans. First- Direct Mutual Fund and second- Regular Mutual Fund. In a direct mutual fund, the investor buys the mutual fund directly from the company without any distributor and agent. Whereas in a regular mutual fund scheme, it is purchased through an agent.
If you want to invest in the stock market and do not have much knowledge, then it is considered good to invest in mutual funds. Experts also believe that if invested in the right mutual fund with a long-term perspective, one can get good returns. Most mutual fund schemes come with two types of plans. First- Direct Mutual Fund and second- Regular Mutual Fund.
Direct Mutual Fund
Direct mutual fund means that the investor buys the mutual fund directly from the company without any distributor and agent. It is as if you purchased the product directly from the manufacturer. The biggest advantage of direct mutual funds is that you can easily invest in the mutual fund scheme without paying any commission. This also reduces the cost of investment. The disadvantage in this is that you do not get the help of an agent.
Regular Mutual Fund
In regular mutual funds, the investor invests through a mutual fund agent or distributor. Every time you do SIP of such funds, you have to pay commission to the agent or distributor. The advantage of regular mutual funds is that the agent helps you in investing, whereas this happens in direct mutual funds.
Regular vs Direct Mutual Scheme which is better?
By investing directly in direct mutual funds, the investor gets a better return. At the same time, in the regular case the returns get reduced due to paying commission etc.
If you are an investor who knows about mutual funds and can monitor your investments from time to time, then a direct mutual fund scheme will be better for you. However, if you cannot do this then you should choose a regular mutual fund scheme.
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