What is Direct Mutual Fund?
Every mutual fund in India comes in two flavors — a regular plan and a direct plan. When you buy a regular plan, you buy it through a bank, broker, agent or distributor and the mutual fund company pays him back a hidden commission every quarter.
Instead, when you buy a direct plan directly from the mutual fund company, you don’t pay any commission to anyone. The commission that you end up saving is added to your investment balance at the mutual fund. That’s why the net asset value (NAV) of a direct plan is always higher than that of a corresponding regular plan.
Inventing in direct mutual funds would be little tedious process until a few years back one as go through the AMC website KYC process etc. Now serval best platforms where one can direct Mutual Fund without even going to AMC website. In this article, we could detail about best direct Mutual fund platforms.
Difference between Direct Mutual Funds and Regular Mutual Funds
# Expense Ratio
The Direct Mutual Funds expense ratio will be lesser than the Regular Mutual Funds. However, the difference varies based on the type of funds you choose and the particular fund.
Due to the absence of expense of middlemen, the NAV of direct and regular funds will be the difference. The NAV of Direct Mutual Funds will be higher than Regular Mutual Funds.
# Fund name
The fund name for regular funds will be like HDFC Top 200-Regular-Growth., However, for direct funds, the name will change as HDFC Top 200-Direct-Growth.
Also, you notice that in your account statement the ARN field will be mentioned as DIRECT.
Due to less expense ratio, the returns will definitely higher than the regular funds. Even though the difference is around 0.5% to 1%, if you compound it for long-term, then it creates a huge cap.
For example, let us say Rs.1 lakh investment in a Direct Plan and a Regular Plan over 40 yrs. Your investments will be worth 35% more in just 20 yrs when you invest in Direct Plans (Assumption a 12% Return on investments and a Total Expenses Ratio of 1.0% for Direct Plans and 2.5% for Regular Plans.) Look at below chart.
Best Direct Mutual Funds Platforms in India to invest online
1. Respective AMC websites
2. MF Utility
10. Zerodha Coin
13. Wealth Trust
Respective AMC websites – All assets management companies have their portals. Go to the online portal who’s which mutual fund want to invest.
MF Utility – MF Utility is a free and efficient “transaction Aggregating Portal” supports most of the AMCs. Through MF Utility platform, investors can invest in multiple schemes of any AMC in a single transaction. It allows investors to invest in direct mutual funds. There is no need to remember different folio numbers for each and every investment while transacting through this platform. Hence, it is one of the best online platforms to invest in direct mutual funds.
MyCAMS– CAMS platform facility is available in the form of a website and an app. You can use CAMS platform for those mutual fund companies which are serviced by my CAMS. As of now, CAMS is supporting 15 mutual funds and the list of CAMS serviced mutual funds companies are given below.
Karvy Platform-You can buy direct mutual funds through Karvy platform. KTrack is a mobile application of Karvy with transacting capabilities. KTrack provides paperless and hassle-free mutual fund transaction experience to the investors. You can buy the below AMCs direct mutual funds using Karvy platform.
Bharosa Club –Bharosa is SEBI register advisor. Its offer unbiased quality advise that helps to create more wealth without paying the hidden cost.