It has been about three-and-a-half years since direct plans of mutual funds were launched in January 2013. Though informed investors, mostly companies, have been availing these services, retail investors are yet to turn aggressive.
But there is a strong case for direct plans. The expense ratio of these plans is lower than that of regular plans: The difference can range from 60-150 basis points, depending on fund type. While the amount saved each year may appear small, it can make a huge difference over a lifetime. Industry sources say that with an average saving of 100 basis points (or 1 percentage point) a year on expense ratio, an individual can end up with a retirement corpus that is around 25 per cent bigger.
India's wealthy opt for term insurance policies worth Rs 5-20 crore: Report
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