Tool 03 · Fees

What a "small" fee actually costs

The commission on a Regular plan is quoted as "just 1%". But it's 1% of your entire balance, every year, forever — and it compounds against you exactly the way returns compound for you.

Your investment
e.g. a Direct-plan index fund (0.1–0.3%)
e.g. a Regular-plan active fund (1.5–2.25%)
Plan A (low fee) grows to
—
Plan B (high fee) grows to
—
The fee silently took
—
Where your corpus went
Your contributions Growth you keep Lost to the higher fee

Why this happens

The mechanics of the quiet debit
Invisible

You never see the charge

Fees are deducted from the fund's NAV daily — there's no bill, no SMS, no line item. Your statement just shows slightly lower returns, indistinguishable from a slightly worse market.

On the whole balance

The fee grows with your corpus

1% of ₹1 lakh is ₹1,000. But by year 20 your corpus might be ₹75 lakh — and the same "1%" is now ₹75,000 every year, whether the fund performs or not.

The fix

Same fund, cheaper door

Every Regular plan has a Direct twin: identical portfolio, identical manager, minus the distributor commission. Buy Direct plans from the AMC's own site or apps like Kuvera, Zerodha Coin, or Groww (direct-plan mode). Switching existing Regular units to Direct is possible but is a taxable redemption — check your gains first.

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