Direct vs regular plan
Direct has no distributor commission.
Why it matters
Over 20 years the cost gap can eat 15–25% of your corpus.
What to check
Apps and agents selling regular plans by default.
Personal finance
Mutual Funds (India)
Indian mutual funds are sold on past returns and star ratings. What matters more is how long you can stay invested, the fund category, the expense ratio, and whether a direct plan saves you commission.
Quick answer
Build an emergency fund first, then start a .
Under 3 years: debt or liquid funds. Over 5 years: equity index funds.
Choose direct plans to save roughly 0.5–1.5% a year.
Do not stop SIPs when markets fall.
Find your fit
A few questions about your situation, not about the product.
0/20
Add one short need not covered above.
Answer all 2 questions to see the spec sheet to shop with.
The spec sheet, decoded
Expense ratio
Yearly fee taken from the fund.
Why it matters
Index funds charge 0.1–0.3%; active funds 0.5–2%.
What to check
High fees with returns no better than the index.
Fund category
Large cap, flexi cap, small cap, debt, hybrid, etc.
Why it matters
Category decides risk more than the fund house does.
What to check
Owning five funds in the same category.
SIP
Fixed monthly investment.
Why it matters
Averages your buying price and builds discipline.
What to check
Stopping during market falls, when units are cheapest.
Exit load
Fee for selling within a set period, often 1% within a year.
Why it matters
Affects short-term withdrawals.
What to check
Using equity funds for money needed soon.
Taxation (LTCG/STCG)
Tax on gains when you sell.
Why it matters
Equity gains above ₹1.25 lakh (≈$1,500) a year held 1+ year are taxed at 12.5%.
What to check
Debt fund gains taxed at your slab rate.
Before you pay
- ✓Keep 6 months of expenses in a liquid fund or savings first.
- ✓Match the fund category to when you need the money.
- ✓Pick the direct plan and compare expense ratios.
- ✓Limit yourself to 2–4 funds that do different jobs.
- ✓Complete KYC and add a nominee.
Common traps
- !Buying last year's top performer.
- !Insurance-cum-investment plans sold as mutual funds.
- !Too many overlapping funds.
- !Redeeming in panic during a crash.
SIPs start from ₹500 (≈$6) a month.