Expense ratio

The expense ratio is the annual fee a mutual fund deducts from your investment to cover fund management, distribution, audit and other costs. It's quoted as a percentage and silently subtracted from NAV every day — you don't see a separate charge.

Direct plans typically have expense ratios 0.5–1% lower than regular plans (no distributor commission). That difference compounds enormously: 0.75% saved annually over 20 years means roughly 15% more corpus at the end.