Let us talk about,
Mutual Fund scheme has a Direct Plan and a Regular Plan.
An Direct Plan -- You can buy straight from the mutual fund companies typically from websites and normal Strategy You can buy through mediator like agent, adviser, distributor etc.. Commission is paid to the intermediary by business in Routine plans. If you invest in Mutual Funds through a broker or a distributor, then you are investing in Regular Plans. However, when you invest through the Mutual Fund straight or seek the aid of an advisor you invest in Direct Plans. All indirect Strategy of mutual fund schemes require the term"Direct" or"Direct Plan" to be clearly mentioned in the strategy name.
Mutual Fund Houses/AMCs (Asset Management Companies) -- You can Directly visit the Mutual Fund website of this finance. All you have to do would be to fill out an application form searching for your personal details, bank account details, KYC etc. and you'll be allotted the units upon payment. Through MFU(Mutual Fund Utilities)/CAMS (Computer Age Management Services) and SEBI registered investment consultants can simply recommend direct plans.
Regular plan you invest through a Distributor or advisor. AMCs usually pay some commission to agents for their services. Now, investors can avoid paying these commissions and it will Translate into more yields each year. The Direct Plan has a lesser Expense ratio as compared to existing Regular plans at the very same schemes plan. Investments under the Immediate Plan are open to all investors that Choose to spend without intermediary.
The direct plans of mutual funds generate higher returns as compared to regular plans. Depending on the expense ratio this difference in returns could be as high as 1.5% yearly. Due to the power of compounding this 1.5% could swell into a sizable amount over a long period of time.
|Amount||Return % p.a.||Tenure||Regular Plan||Direct Plan||Difference|
|Rs. 15000||8.00%||10||27,44,191||28,44,373||Rs. 1,00,182|
|Rs. 25000||8.00%||10||45,73,651||47,40,622||Rs. 1,66,971|
|Rs. 15000||12.00%||15||74,93,703||79,65,424||Rs. 4,71,721|
|Rs. 25000||12.00%||15||1,24,89,505||1,32,75,707||Rs. 7,86,202|
After 1 year: If the regular fund has a value A, the direct fund will have value (approximately)
A x (1+0.5%)
After 3 years: If the regular fund has a value B, the direct fund will have a value (approximately)
B x (1+0.5%) x (1+0.5%) x (1+0.5%) and so on.
In the above example I have assumed 0.5% as a constant difference in expense ratios. If this difference is 0.5% in 1st year, 0.4% in 2nd year and 0.6% in 3rd year then we will have:
B x (1+0.5%) x (1+0.4%) x (1+0.6%)
So if you disciple to stay invested for a long period of time a ‘good’ fund then can be a significant difference in corpus.
Direct plans definitely have more benefits than regular plans. Portfolio will be the same for both Plans. Investment Objective, Investment Strategy, Exit Load, risk factors, facilities offered and other terms and conditions will continue to be same.
It is obviously better to invest in direct plans for higher returns, but this also requires more hard work from the investor as he has to do the paperwork and choose a suitable fund.
Do not fear, we have a Online Platform where you can compare and invest in direct mutual fund without paying commission you can save upto 28 lacs in 25 yrs. comprehensive automated advisory that is based on a scientific algorithm and will recommend you to invest in best schemes to fulfill your goals. We providing you all the information you ever need.
Always look for or ask for the word “Direct” or “Direct Plan” to be clearly mentioned in the scheme name in your portfolio statement.
Read Complete Article Difference Between Direct Mutual Fund and Regular Mutual Fund and know how to save 25 lacs in 25 yr just to switch
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Certified Financial Advisor
SEBI Register Investment Advisor
This is Turk from MMB. I moved out from MMB because of several untoward incidents in the past 2-3 years from various boarders as well as from the new breed of MMB admin. The structure of MMB is perhaps the seed issue there, although not visible. There were a lot of discussion and calls, but with no real track record check. Any one with a call posts it on a day and it cannot be seen if he lived up to that.
I had been a member there since 2006 and a Platinum member perhaps since 2012. In the past 3-4 years there were a flurry of newly created IDs with tens of thousands of followers. How come? Their posts also did not really convey any real knowledge and research. Initially it appeared just as a phenomenon, which soon turned quite questionable. MMB was also seen to promoting boarders who pays/advertises. All in all, it went past my personal values, standards and requirements.
So here, I am.
Now let's understand about how do I intend to manage this forum. It is necessary to delineate it at the outset.
(1) If someone takes pains to do a good research on a sector/trend and makes a write up, it will be responded to.
(2) Just because I am accepting a friends' request. does not mean I will respond to inquiries and pleasantries.
(3) Just too busy, and just too many messages from all kinds of sources and platforms.
(4) Expect barely any message. Start with none, as expectation.
(1) That's essentially almost all, so far as messaging is concerned.
(2) See if a call is open. You buy/hold/do nothing. Do your own research.
(3) See if a call is closed. You sell/hold/do nothing. Your money, your profit/loss.
(4) Check what had happened to previous calls.
(5) This is going to be a boring, testing-patience kind of a place. Expect calls very rarely.
It must be recalled that I am NOT a SEBI registered professional. Just a Senior Business Executive, who ran multiple public/private businesses for several years, and then moved into Stock Investments full time for the past 12 years. It should be obvious that when a call is opened, I have bought it and when a call is closed I have sold it. All based on my understanding and expectations. In between I may be adding/ reducing/ or, mostly, just holding. What one does on the calls, is his decision.
Any major communication that's required and that I intend to do, will be done via such blogs.
Namaste!!! Happy Investing!!! May we prosper together.
13th September 2018
The day of Ganesha Chaturthi
In our country, the inflation in healthcare cost is constantly on the rise. A critical illness in the family can plunge them into severe financial distress. This makes it inevitable to equip yourself and your loved ones with adequate health insurance.
There are many who would not purchase health insurance because they are already covered under the corporate health insurance umbrella of their employers. It should be noted that the group health insurance plan offered by employers do not safeguard the employee from all medical conditions. Effectively, the coverage of such policies is usually not comprehensive enough to support all your healthcare needs.
● You should identify if the employer’s healthcare plan offers protection for all your dependents.
● You should also check the type of illnesses that your employer’s health insurance plan covers. This is particularly significant if you or your dependent has a history of known medical conditions.
● If the employer’s group insurance does not offer you sufficient coverage, then you should ideally purchase additional health insurance for your needs.
However, there are a couple of things to keep in mind when you look for a suitable insurance plan:
1. Your requirement - When planning to get your family insured, you need to consider:
a. the age of each member of your family
b. if anyone is suffering from chronic illnesses, and,
c. the medical history of the family
You should be aware that most health insurance plans have a mandatory waiting period for medical conditions that are pre-existing. So, you should plan and apply for a health insurance policy accordingly. If relevant, it is a great idea to include maternity coverage in your policy.
2. Sum insured - This is one of the most critical factors that drive your decision on a health policy. The sum insured is effectively the maximum amount of cover that is provided for medical expenses in a policy year. There is a direct correlation between the sum insured and the policy premium. You can decide on your sum insured by exploring factors that form the basis of this value, such as, your area of residence (because medical expenses are usually higher in metro cities), the medical history of your family, and your medical expenses in the recent past. If you need a greater amount as sum insured, you will be required to pay higher premiums. In effect, you need to confirm that the sum insured is sufficient to cover your medical requirements.
3. Coverage - You can choose to obtain an individual health insurance policy or a family floater plan. If you have a family, it is advisable to purchase a family floater plan, as the per person premium will work out to be cheaper in comparison to multiple individual policy premiums. Only if any family member has some pre-existing health issues should you buy him/her an individual medical insurance, while the rest of the family is covered by a family floater plan.
4. Exclusions - If anyone in your family suffers from an illness that is not covered by the policy, your claim will be rejected, and you will have to bear the expenses yourself. In order to avoid such unpleasant situations, you should be aware of the exclusions in your medical insurance. It is prudent to ensure that hereditary diseases are included in the coverage as well.
5. Network hospitals - Cashless hospitalization facilities can only be availed at network hospitals. So, browse through the list of network hospitals in the policy and see if it is inclusive of the facilities that you generally visit. Also check if the empanelled hospitals have good reputation and provide quality services. Additionally, you should identify if the policy covers hospitals in other cities, as you should be able to access network hospitals wherever you travel in the country.
Buying a medical insurance policy should be a well-thought-out move. The above pointers will assist you in identifying one that best suits your needs.