Translation unavailable - this article is shown in English. View English version
Summary
Investment fees in India are regulated by SEBI, which caps the Total Expense Ratio (TER) for mutual funds on a slab basis depending on AUM. Even small differences in TER — 0.5% vs 1.5% — compound into lakhs of rupees lost over a 20-year investment horizon. The calculator shows the long-term cost of fees on your portfolio.
How it works
Total Expense Ratio (TER)
TER includes fund management fees, distribution commissions, operating costs, and GST. SEBI mandates declining TER slabs as AUM grows:
| AUM slab (equity funds) | Maximum TER |
|---|---|
| First Rs 500 Cr | 2.25% |
| Next Rs 250 Cr | 2.00% |
| Next Rs 1,250 Cr | 1.75% |
| Next Rs 3,000 Cr | 1.60% |
| Next Rs 5,000 Cr | 1.50% |
| Above Rs 50,000 Cr | 1.05% |
Index funds and ETFs typically have TER of 0.1-0.5%, significantly lower than actively managed funds at 0.8-1.8%.
Direct vs regular plans
Every Indian mutual fund has two plans:
- Regular plan: Includes distributor commission (0.5-1% higher TER)
- Direct plan: No commission, lower TER
The same fund’s direct plan always outperforms the regular plan by the commission difference, compounded over time.
Other fee types
- PMS (Portfolio Management Service): Fixed fee (1-2.5%) or profit-sharing (10-20% above hurdle rate). Minimum investment Rs 50 lakh.
- Demat account AMC: Rs 300-900/year depending on broker
- Brokerage: Rs 0-20 per trade (discount brokers) or 0.1-0.5% (full-service)
- Exit load: Typically 1% if equity MF redeemed within 1 year, nil after
Worked example
SIP of Rs 20,000/month for 20 years, Pre-fee return: 12%
| Scenario | TER | Effective return | Final corpus | Cost of fees |
|---|---|---|---|---|
| Index fund (direct) | 0.2% | 11.8% | Rs 1,93,18,000 | Rs 6,72,000 |
| Active fund (direct) | 1.0% | 11.0% | Rs 1,71,93,000 | Rs 27,97,000 |
| Active fund (regular) | 1.8% | 10.2% | Rs 1,53,05,000 | Rs 46,85,000 |
Choosing the regular plan of an active fund over a direct index fund costs Rs 40,13,000 — over 3.3 years of SIP contributions — purely in fees.
Key differences from other markets
- SEBI TER caps: India is one of few markets with regulatory caps on mutual fund expense ratios. UK and US funds are not capped, though competition has driven fees down.
- Direct vs regular plan transparency: India’s dual-plan structure makes fee comparison straightforward. In the UK and US, the equivalent (clean vs bundled share classes) is less visible to retail investors.
स्रोत
Related calculators
SIP Step-Up
Compare a flat SIP vs step-up SIP with annual increases. See how increasing your SIP by 10% every year can dramatically grow your mutual fund corpus.
Compound Interest
Calculate compound interest on Indian FDs and savings. Average savings rate: 2.50% (Feb 2026). See how your money grows over time.
FIRE India
Calculate your FIRE number for India with inflation-adjusted expenses, healthcare costs, equity/debt portfolio split, and LTCG tax impact. Based on Indian SWR research (3-3.5%).
Investment Fees
Calculate how much investment fees cost you over time. Compare low-cost index funds vs actively managed funds and see the compound impact of fees on your ISA, pension, or investment portfolio.