How to Transfer / Convert Regular Mutual Fund to Direct Plan?


It has been estimated and found that only 12% of investors decide on investing in Direct mutual funds. Now let’s understand why to convert regular mutual fund to direct plan? The primary reason is the investors are completely unaware of how to switch from regular to direct mutual fund plans. Investors who understand the financial market very well, then direct mutual funds is appropriate for them. They need to take their own decision whether to invest as there is no mediator involved who will provide any financial guidance or advice.

If you are a novice person and decide to invest in mutual funds, then before investing, you must know the Difference between direct and regular mutual funds. This is a must in order to finally take the right investment decision that works in your favour. After investment you thing decision was wrong, then you will have to transfer from regular to direct mutual fund. Those who are new to mutual funds can initially learn about what is a mutual funds and then start analyzing.


It was in January 2013 that SEBI introduced direct mutual funds. SEBI made it compulsory for the AMCs or Asset Management Companies to give an opportunity to the investors in investing in mutual fund plans directly devoid of any intervention of any agent, distributor or broker.

In recent times, Mutual funds investment has increased ten-folds and investors globally are keen on investing in mutual funds. Let’s take a look at the two mutual fund plans that is Direct Vs Regular mutual funds.

Regular as well as Direct mutual funds are two options to buy completely the same mutual fund scheme offered by similar fund managers like IDFC Mutual Fund. The only difference that lies between the two is that in case of regular mutual funds, the mutual fund house pays a certain amount as commission to the broker whereas in the case of direct mutual funds, no commission is paid to any agent, distributor or broker.

Thus, the commission in case of direct mutual fund schemes, gets added to the investment balance. In a way, the return increases over time. Direct mutual fund investment is a much-preferred investment option among investors as the expense ratio is low.

How to Convert Regular Mutual Fund to Direct Plan?

Most of the mutual fund investors are unaware that you can convert regular mutual fund to direct plan. The transfer from regular to direct mutual fund can be made both online and offline.

In online mode, the system of switching varies from platform to platform. The switch is generally treated as the redemption from the regular plan. Thus, on most of the platforms, you need to choose the “redemption funds” option and can then place your order for purchasing the direct plan after the money gets credited to your account.

In offline mode, you need to visit the nearest branch of your chosen mutual fund scheme in which you invested and request for a “transfer from regular to direct mutual fund form”. If a “convert regular mutual fund to direct plan form” is not available at the branch, then ask for “redemption form”. You need to fill the required field and submit it with a signature. The fund house like IDFC Mutual Fund will send you an email as soon as the switch is processed.

Why Must an Individual Transfer from Regular to Direct Mutual Plan?

Investment means to get better returns quite obviously. Thus, a plan that benefits investors is much preferred. It is indeed a rational decision to invest in direct mutual fund scheme other than the regular plan. It is because with investing in the direct plan, the expense ratio is comparatively lower than the regular mutual fund plan. At the same time, the investors get high returns because of reinvestment and amount compounding that gets paid as a commission to the broker or agent in the regular mutual fund. So it’s always better to convert regular mutual fund to direct plan.

If you are unable to decide which option to choose for, when it comes to investing in mutual funds, then it is best to take the decision on your own without consulting with anyone. The present situation in terms of mutual funds is the direct mutual fund plan is dominating the market. You must not brood over the matter as How to buy direct mutual funds? 

All you need to do is to choose your mutual fund house, visit the nearest branch, complete all formalities and make the investment. You can invest both online as offline, which mode to opt for is your sole discretion. The investment must be such that gives you higher returns, and direct mutual fund is the ultimate option for investing in mutual fund plan. If you have made investment earlier in regular mutual funds, then you can opt to transfer from regular to direct mutual fund.


Direct mutual funds are indeed good for those who are keen on investing in mutual fund plans directly without the help of any agent or broker. Even if you have already invested in a regular mutual fund scheme, process to convert regular mutual fund to direct plan is not a hassle.

In the case of a direct mutual fund, investors can do their research and choose the top-rated mutual fund scheme. The analysis can be done by reaching out to the websites of Mutual funds investment houses. Right from documentation to investment, everything can be managed by the investors, though the process might appear complicated initially; for the long-term, it is the best choice one can make for investment.

One has to put in some hard work and effort towards choosing the right mutual fund product for investment. After all, putting in your hard-earned money necessitates patience and research. Another thing you should be wary of is fly-by-night sellers of investment products in this space. Always double check before purchasing and rely on reputed financial players and organizations only. If you hold any regular mutual plan, I will suggest you to get transfer from regular to direct mutual fund as soon as possible. As it has more advantages than the traditional style of investment.

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