What is the expense ratio (TER)?
The expense ratio, or Total Expense Ratio (TER), is the yearly fee a fund charges to manage your money, shown as a percentage of your investment. It is deducted daily from the fund's NAV, so you never pay it separately.
Direct plans have a lower expense ratio than Regular plans because no distributor commission is paid. Over many years, even a 0.5% difference adds up to a large amount.
Example
On ₹1,00,000 invested, an expense ratio of 0.70% costs about ₹700 a year, already reflected in the NAV.
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