Expense Ratio Impact Calculator (Direct vs Regular)
How much a fund’s yearly expenses take from what you end up with.
Value over time
Year by year
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Expense Ratio Impact Calculator (Direct vs Regular)
A fund’s expense ratio is the share of its assets it takes each year to pay for managing the fund, distribution and other costs. It is never billed to you: it comes out of the fund’s value bit by bit, so the returns you see are already after it. A difference of one percentage point a year looks small, but it compounds — on a long investment it can take a large slice of what you would otherwise end up with.
This calculator compares two funds with the same return before expenses and different expense ratios — the direct and regular plans of an Indian mutual fund scheme, an index fund and an active fund, or two share classes of the same fund — for a lump sum or a monthly investment (SIP). It shows the value each ends with, the expenses paid, the return after expenses, the gap year by year and how much of it is fees and how much is the growth those fees would have earned, with an optional exit load.
How to use it
- Choose a lump sum or a monthly investment, and enter the amount and the years you stay invested.
- Enter the return you expect a year, and say whether it is before expenses or already after fund A’s expenses (a direct plan’s published return, for example).
- Enter the expense ratio of each fund in % a year (the fund’s fact sheet states it), and their names if you like.
- Optionally add an exit load and the months within which it applies.
- Read the final values, the expenses each fund takes and the year-by-year table; copy the summary or download the table as CSV.
Examples
1,000 a month for 20 years at 10% a year before expenses; expense ratios 0.5% and 1.5%
678,514 against 597,194 (240,000 invested) · expenses 24,380 against 67,030 · the 1.5% fund ends 81,320 lower: 42,650 of extra expenses and 38,670 of growth lost on them
100,000 for 10 years at 8% before expenses: an index fund at 0.2% and an active fund at 1.0%
211,617 against 195,339 · with no expenses it would be 215,892
10,000 a month for 15 years; the direct plan earns 12% a year after its 0.5% expenses; the regular plan of the same scheme charges 1.5%
The regular plan earns 10.88% a year and ends at 4,328,150 against 4,759,314 — 431,164 less
Common uses
- See what switching from a regular plan to the direct plan of the same scheme would save over your horizon.
- Compare an index fund with an active fund that would need to earn more before expenses to keep up.
- Check how much a fund’s expenses will take from a long SIP.
How the cost is worked out
Each month the fund earns the return before expenses, i = (1 + g)^(1/12) − 1 for a yearly return g, and the expense ratio e takes e ÷ 12 of its value. A monthly investment goes in at the start of the month:
- value = (value + investment) × (1 + i) × (1 − e ÷ 12), month by month;
- return after expenses = (1 + g) × (1 − e ÷ 12)^12 − 1 a year — 10% before a 1.5% expense ratio is 8.36% after it;
- expenses paid = the sum of what is taken each month.
Funds charge their expenses daily on their net assets; taking them monthly gives the same result to within a few hundredths of a percent. The gap between two funds is the extra expenses plus the growth that money would have earned had it stayed invested.
Direct and regular plans in India
SEBI requires every mutual fund scheme to offer a direct plan for investments not routed through a distributor. It has a lower expense ratio, because no distribution commission is paid from it, and a separate NAV (SEBI Master Circular for Mutual Funds, para 3.4). The portfolio is the same as the regular plan’s, so the difference in returns is the difference in expenses.
The SEBI (Mutual Funds) Regulations, 2026 cap the base expense ratio (regulation 66): for an open-ended equity scheme 2.10% on the first ₹500 crore of daily net assets, falling in slabs to 0.95% on assets above ₹50,000 crore, and 0.90% for index funds and ETFs. The total expense ratio adds brokerage, transaction costs and statutory levies such as GST (regulation 67). The exit load of an open-ended scheme is at most 3% of the NAV (regulation 44(4)).
Where to find an expense ratio
A fund’s fact sheet, key information document or prospectus states its expense ratio, and fund platforms show it next to each fund. Use the current total expense ratio for both funds; if a fund’s ratio changes over time, try the range of values.
Limitations
- The return before expenses is the same every year and the same for both funds. Real returns vary, and an active fund may earn more or less than an index fund before its expenses.
- Expense ratios stay the same over the whole period; in practice they change with the fund’s size and its fee decisions.
- Taxes, entry charges and transaction costs outside the expense ratio are not included. The exit load is charged once, at the end, on the units held for less than its period.
- The results are estimates for comparing costs, not a forecast of what a fund will return.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
What is an expense ratio?
The yearly cost of running a fund as a share of its assets: management fees, distribution costs, administration and other charges. An expense ratio of 1% takes about 1 of every 100 invested each year, a little each day, from the fund’s value.
How much does a 1% higher expense ratio cost?
It depends on the amount, the return and the time. With 1,000 a month for 20 years at 10% before expenses, 1.5% instead of 0.5% leaves you 81,320 lower — more than a third of the 240,000 invested.
Is the expense ratio deducted from my investment?
Not as a separate charge: it is taken from the fund’s assets before the NAV (price) is worked out each day. That is why the fund’s published returns are already after its expenses.
Which return should I enter?
If you have a return before expenses (the index or the portfolio’s own return), choose before expenses. If you have the published return of fund A — for example a direct plan’s — choose after fund A’s expenses and the calculator works out the return before them.
Should I count the exit load?
Only if you may redeem within its period. A SIP redeemed after two years with a 1% exit load within 12 months pays it on the last 11 instalments, which have been held for less than a year.