How to Invest in Direct Mutual Funds in India: A Step-by-Step Guide

Investing in mutual funds is not just for finance pros or stock market experts. With the rise of easy-to-use apps and zero-commission platforms, anyone can learn how to invest in direct mutual funds—and you don’t even need a broker!

In this guide, we’ll break it all down for you in plain, simple language. Whether you’re just starting your financial journey or switching from regular mutual funds, understanding how to invest in direct mutual funds online can help you take better control of your money.

Why Direct Mutual Funds Are Gaining Popularity?

So, why is everyone talking about direct plans these days?

It’s simple: in a direct mutual fund, you invest directly with the fund house, cutting out the middleman. That means no commissions. No hidden fees. More returns in your pocket. Over time, this small difference can lead to substantial gains. And if you’re just starting to explore what are mutual funds, direct plans are a great way to dive in with more transparency and control.

What Makes “Direct” Plans Different from “Regular” Plans?

You may have heard the term “direct vs regular mutual funds.” Here’s what that means:

• Direct Plans: You invest directly with the mutual fund company (AMC)—no distributor involved. No commission. Better returns.
  
• Regular Plans: Investments are managed through an intermediary, such as a bank or broker. You pay a small commission every year from your returns.

When comparing returns over 5–10 years, the direct plan typically outperforms. That’s why more and more people want to learn how to invest in direct plan mutual fund options instead of regular ones.

What Are Direct Mutual Funds?

Definition of Direct Plans in Mutual Funds

A direct mutual fund is simply a mutual fund where you invest directly through the Asset Management Company (AMC), without any broker or agent—this is the core idea behind investing in direct plan mutual funds, the smart way.

Direct vs Regular Mutual Funds: Key Differences

Feature	Direct Mutual Funds	Regular Mutual Funds
Definition	You invest directly with the Asset Management Company (AMC), with no middleman or distributor.	You invest through an intermediary, such as a broker, bank, or agent, who earns a commission.
Commission/Fees	No commission or distribution fee.	Includes distributor commission, which is paid from your returns.
Returns	Slightly higher returns over the long term due to no commission cuts.	Lower returns compared to direct plans because of the fee deductions.
NAV (Net Asset Value)	A higher NAV is achieved since no commission is involved.	Slightly lower NAV due to the embedded cost of commission.
Who Manages the Investment	You manage it yourself—take a DIY approach.	The advisor or intermediary helps you choose and manage investments.
Research/Monitoring	Requires basic knowledge and self-research.	Minimal effort is needed—your advisor guides you through.
Suitable For	Investors who are comfortable with online platforms, want higher returns, and prefer control.	Beginners who want hand-holding or prefer advice and support from professionals.
Where to Buy	AMC websites, direct investment apps (e.g., Groww, Kuvera), government platforms (CAMS, MF Central).	Through banks, brokers, or agents, either offline or via platforms that charge commission.
Transparency	High transparency—you know exactly what you’re paying for.	Less transparency—costs are bundled into the fund’s expense ratio.
Example	“Nippon India Large Cap Fund – Direct Plan – Growth”	“Nippon India Large Cap Fund – Regular Plan – Growth”

Benefits of Investing in Direct Mutual Funds

• Higher returns due to no commission cuts
  
• More transparency in charges and NAV
  
• Full control over your investments
  
• Suitable for DIY investors who want to be hands-on
  

How to Invest in Direct Mutual Funds in India?

If you’re wondering how to invest in direct mutual funds without any confusion, this section is for you. Investing directly may sound technical, but it’s a straightforward process. From setting your goals to picking the right plan and platform, here’s a step-by-step guide on how to invest in direct mutual funds in India with ease.

1. Identify Your Investment Goals

Are you saving for a house? Your child’s education? Retirement? Whether short-term or long-term, your goals will determine your strategy.

2. Choose the Right Mutual Fund Category

You can choose from:

• Equity Funds (for long-term growth)
  
• Debt Funds (for stability and fixed income)
  
• Hybrid Funds (a mix of both)
  

Use a tool like a sip calculator to understand how much you need to invest monthly to reach your goal.

3. Select the Direct Plan of Your Chosen Fund

When searching, always pick the plan with “Direct” mentioned in the name. For example: “HDFC Midcap Opportunities Fund – Direct Plan – Growth.”

4. Complete the KYC Process

You can do this online or offline. You’ll need:

• PAN Card
  
• Aadhaar Card
  
• Bank Details
  
• A selfie or in-person verification (for some platforms)
  

5. Invest via AMC Website, App, or Third-Party Platform

If you want to know how to invest in mutual funds directly in India, this is the way to go. You can visit the official website of the mutual fund house (AMC), use their app, or choose a trusted, zero-commission platform. These options make the investment process simple, fast, and paperless.

6. Set Up SIP or Lumpsum Investment

You can invest:

• SIP (Systematic Investment Plan) – monthly fixed investment
  
• Lumpsum – one-time large investment
  

Starting small? Go with SIP. It’s less stressful and builds discipline.

How to Invest in Direct Mutual Funds Online?

Now, let’s discuss how to invest in direct plans of mutual funds online.

1. Investing Through AMC Websites

Visit the official website of the mutual fund (such as ICICI, Axis, or HDFC) and create an account. Choose the fund and select the direct plan.

2. Using Government Platforms

MF Central (by AMFI) or RTAs like CAMS and KFintech enable you to manage multiple Asset Management Companies (AMCs) in one place.

3. Popular Zero-Commission Apps

Apps like Groww, Kuvera, and Paytm Money make it super easy. Just search, select, and start investing.

How to Track and Manage Your Direct Mutual Fund Investments?

Once you’ve learned how to invest in direct mutual funds, the next important step is to manage them smartly. Staying on top of your investments enables you to make informed decisions and stay aligned with your financial objectives. Here’s how you can do it:

• Monitoring Performance Through AMC Portal or CAS

Log in regularly to the AMC’s official website or the app you used to invest. Most platforms offer detailed dashboards showing your fund’s current value, returns, and performance over time.

You can also check your Consolidated Account Statement (CAS)—a single report that shows all your mutual fund holdings across different AMCs. It’s like a snapshot of your entire investment portfolio, sent to your email monthly or on request.

• Reviewing SIP Progress, Portfolio Rebalancing, and Exit Load Awareness

Every 3 to 6 months, take a quick look at how your SIPs are doing. Are the funds meeting your expectations? Are they still aligned with your goals?

Once a year, rebalance your portfolio if needed—maybe shift between equity and debt based on your risk appetite or life stage.

Also, be aware of exit loads—fees that apply if you withdraw funds too early from certain accounts. Keeping track of these ensures you don’t lose a chunk of your gains unexpectedly.

Pros and Cons of Direct Mutual Fund Investing

Pros:

• No commission – You don’t pay any agent or distributor fees, which means more of your money stays invested and works for you.
  
• Higher returns – Since no commissions are deducted from your profits, direct plans typically yield better long-term returns compared to regular plans.
  
• Direct access to fund info – You get transparent, real-time updates directly from the AMC, helping you stay in control of your investments.

Cons: 

• No hand-holding – There’s no advisor to guide you, so you have to make your own decisions and understand what suits your needs.
  
• Requires basic research –  To make smart choices, you’ll need to spend a little time understanding fund types, risk levels, and market behavior.
  
• May feel overwhelming at first. If you’re just starting and figuring out how to invest in direct mutual funds, the process may seem confusing, but it becomes easier with time.

Who Should Choose Direct Plans Over Regular Ones?  

If you’re someone who likes learning and wants control over your money, direct plans are a great fit. If not, consider consulting a stock market advisor before investing.

Conclusion

Choosing direct plans makes sense if you’re seeking better returns and greater control over your investments. Now that you understand how to invest in direct mutual funds, it’s time to take the next step. You don’t need to be a finance expert—just a clear goal and a few minutes to get started. The sooner you begin, the better your chances of building long-term wealth.

FAQs on How to Invest in Direct Mutual Funds

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