Investor Corner/Money matters beyond investing/Practical & Operational
4.1.3 Direct Plans: How to Buy
Direct plans can be bought straight from an AMC's own website or app, through registrar platforms, or through certain discount investment platforms, all at a lower cost than the equivalent Regular plan.
The main routes available
Every AMC's own website and mobile app allows direct purchase of its Direct plans without any distributor involved. Registrar platforms, which handle back-end processing for multiple AMCs, offer a way to buy Direct plans across several fund houses from a single login rather than visiting each AMC's site separately. A number of discount investment platforms have also emerged specifically to make buying Direct plans across AMCs more convenient.
Direct plans can be purchased through several channels without involving a distributor. The most common routes are: the AMC's own website (each AMC has a transaction portal where you can invest directly), MF Utilities (MFU, a shared platform created by the mutual fund industry that provides access to all AMCs through a single login), MF Central (a newer platform by CAMS and KFintech that consolidates folio management and transactions), and SEBI-registered Investment Advisers (RIAs) who facilitate Direct plan investments for a flat fee rather than earning commission.
What changes, and what does not
Regardless of which of these routes is used, the underlying scheme and its NAV remain identical; what differs is purely the convenience of the buying experience and, in some cases, the range of additional tools and reporting offered alongside the purchase itself. None of these routes provide personalised advice, which is the trade-off being made in exchange for the lower Direct plan cost.
The AMC website route is the most direct: you create an account on the AMC's portal (for example, SBI MF's investorportal, HDFC MF's online portal), complete KYC, link your bank account, and transact. The limitation is that you need separate logins for each AMC. MF Utilities solves this by providing a single Common Account Number (CAN) that works across all AMCs, allowing you to manage SIPs, lump sums, redemptions and switches across your entire portfolio from one interface.
Several fintech platforms (Kuvera, Coin by Zerodha, Paytm Money in direct mode) also offer Direct plan purchases with a cleaner user interface than the AMC portals. Verify that the platform is genuinely offering Direct plans (check the expense ratio against the AMC's published Direct TER) and understand the platform's business model. Some earn revenue from other services rather than fund commissions; others may default to Regular plans unless the investor specifically selects Direct.
What to check before choosing a platform
Consider whether the platform gives a genuinely clear, consolidated view across all your holdings, rather than only across investments made specifically through that one platform, since money invested elsewhere or years ago can otherwise become difficult to track properly in one place.
How PriLytics helps. Regardless of which platform you use to invest, PriLytics reads your consolidated account statement and organises every holding into one clear, accurate view. See how import works.
Switching from Regular to Direct plans for existing investments involves redeeming from the Regular plan and reinvesting in the Direct plan. This triggers a capital gains event on the Regular plan redemption, which may result in a tax liability. The decision to switch should weigh the ongoing expense saving (which compounds over the remaining holding period) against the one-time tax cost. For investments with a long remaining horizon, the switch almost always pays for itself within 1-2 years. For investments nearing their goal date, the tax cost may exceed the remaining expense saving.