What Your Bank Doesn't Disclose

When a bank RM or distributor sells you a mutual fund, they do not send you an invoice. Instead, the Asset Management Company (AMC) deducts a Trail Commission (typically 0.7% to 1.2% per annum) directly from your daily NAV.

This is a Regular Plan.

In a Direct Plan, you invest directly with the AMC. No commission is paid to any intermediary, so the NAV is higher every single day.

The 20-Year Math

Investing ₹20,000 / month at 12% CAGR:

  • Direct Plan (0.2% Expense Ratio): Terminal Value = ₹1.92 Crores
  • Regular Plan (1.2% Expense Ratio): Terminal Value = ₹1.53 Crores
  • Lost to Commissions: ₹39,00,000

How to Verify Your Folios:

1. Open your Consolidated Account Statement (CAS) from CAMS/KFintech or MFCentral.

2. Look at the exact scheme name.

3. If it says "HDFC Top 100 - Regular - Growth", you are paying trail commissions. If it says "HDFC Top 100 - Direct - Growth", you are in the zero-commission plan.