Direct plan vs regular plan: SEBI's 1 November default, explained

From 1 November 2026, direct plans are to be the default option on mutual fund houses' (AMCs') own websites and apps, SEBI Chairman Tuhin Kanta Pandey said on 28 October, as reported by Upstox and INDmoney. SEBI's website listed no circular on it as of 6 November 2026. Regular plans stay available, and existing SIPs do not switch automatically.

Key facts: SEBI's direct-plan default (as of 6 November 2026)

• What: direct plans become the default choice on AMC-run websites and apps — per SEBI Chairman Tuhin Kanta Pandey, as reported.
• When announced: 28 October 2026, at an NDTV Profit event — reported by Daily Financial; 28 October also per 5paisa and INDmoney.
• Effective: 1 November 2026 — reported by Upstox and CA Club India.
• Scope: AMC-run websites and apps; INDmoney notes the announcement does not set the same default for bank apps, distributor portals, brokers or independent platforms.
• Regular plans: still available; investors choosing them are to be told about the higher expense ratio — reported by 5paisa and Upstox.
• Existing SIPs: not converted automatically — reported by Upstox.
• Official document: none listed on SEBI's circulars page (20 October–6 November 2026) or press releases page (25 October–6 November 2026), checked 6 November 2026; INDmoney and Daily Financial also could not locate one as of 30 October.

What is confirmed and what is not?

What we can say: several outlets independently report the chairman's announcement, the 1 November start, the AMC-platform scope and that regular plans continue. What we cannot say: as of 6 November 2026 we found no SEBI circular, press release or amended regulation that sets out the rule. Until one is published, treat the details as reported, not final. Check SEBI's website for circulars before acting on the specifics.

What is a direct mutual fund plan?

A direct plan is a version of a mutual fund scheme you buy without a distributor, so no distributor commission is built into its costs. A regular plan of the same scheme is sold through a distributor, and the commission is paid through the fund's expenses, so it sits inside the regular plan's total expense ratio (TER), as INDmoney explains. That is why a regular plan's expense ratio is higher.

Direct plan vs regular plan: quick comparison

• Direct plan — bought on AMC sites/apps or other direct channels — no distributor commission inside the TER — lower expense ratio — you pick and monitor funds yourself.
• Regular plan — bought through a distributor, bank or broker — distributor commission inside the TER — higher expense ratio — comes with the distributor's service.

How much do I save with a direct plan instead of a regular plan?

It depends on the gap between the two expense ratios of your specific scheme, which you can find on the AMC's factsheet. We found no verified, current TER-gap figures, so here is an illustration only, with an assumed number.

Illustration (assumed figures, not a real fund): suppose a regular plan costs 1 percentage point a year more than the direct plan of the same scheme. Once your balance is ₹6,00,000 (for example, after ten years of a ₹5,000 monthly SIP, ignoring returns), that extra cost works out to about ₹6,000 in that year, and it keeps applying every year on the full balance.

Will my existing regular SIP change to direct after 1 November?

No. Existing regular-plan investments and SIPs are not converted automatically, as reported by Upstox. Nothing changes in your current SIP unless you change it.

Does the rule apply to my bank app or broker?

Not as announced. The default covers AMC-run websites and apps; INDmoney notes the announcement does not set the same default for bank apps, distributor portals, brokers or independent platforms.

Should I switch from a regular to a direct plan?

That is a personal decision, and Spendzie does not advise on it. Two facts matter. First, switching from regular to direct is a redemption followed by a fresh purchase, so capital gains tax and, in some cases, exit load can apply. Second, a regular plan's higher cost pays for a distributor's service, which some investors value. If you are unsure, speak to a SEBI-registered investment adviser.

How Spendzie fits in: Spendzie reads the bank SMS on your phone, so your SIP debits appear in one list alongside your other recurring payments, which makes it easier to see how many SIPs you run and on which dates. Spendzie is not a SEBI-registered investment adviser or research analyst, does not recommend funds or plans, and does not handle your investments.

Publish notes and sources

• Direct plans default on AMC digital platforms from 1 Nov 2026, per SEBI Chairman Tuhin Kanta Pandey; regular plan investors to be told of higher expense ratio; existing regular investments and SIPs not converted automatically — Upstox, updated 30 Oct 2026 — https://upstox.com/news/personal-finance/latest-updates/november-2026-changes-4-important-updates-for-bank-customers-pensioners-and-taxpayers/article-202449/; CA Club India, 30 Oct 2026 — https://www.caclubindia.com/news/sebi-makes-direct-mutual-fund-plans-default-on-amc-platforms-from-1st-nov-2026-26911.asp (media report)
• Announced at an NDTV Profit event on 28 Oct 2026; no formal circular as of 30 Oct — Daily Financial, 30 Oct 2026 — https://dailyfinancial.in/sebi-makes-direct-plans-the-default-on-mutual-fund-websites-and-apps-from-november-1-what-changes-for-your-sip-and-when-switching-is-worth-it/ (media report)
• Regular plans not prohibited; investors choosing them told of higher expenses; 28 Oct announcement — 5paisa — https://www.5paisa.com/blog/sebi-direct-mutual-fund-plan-default-rule; 5paisa, updated 3 Nov 2026 — https://www.5paisa.com/blog/sebi-s-direct-mutual-fund-plan-default-takes-effect-from-november-1-2026 (media report)
• Scope: AMC websites and apps; announcement 'does not establish the same default' for bank apps, distributor portals, brokers or independent platforms; regular plan pays distributor commission through fund expenses; circular not located as of 30 Oct — INDmoney, 1 Nov 2026 — https://www.indmoney.com/blog/mutual-funds/sebi-direct-mutual-fund-plan-rule (media report)
• No SEBI circular (20 Oct–6 Nov 2026) or press release (25 Oct–6 Nov 2026) on the direct-plan default listed — SEBI circulars page — https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=7&smid=0; SEBI press releases page — https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=6&ssid=23&smid=0 (checked 6 Nov 2026; titles only)
• Business Standard explainer on SIP savings, 30 Oct 2026 — https://www.business-standard.com/finance/personal-finance/sebi-makes-direct-plans-default-know-how-much-investors-can-save-on-sips-126103000975_1.html (source page inaccessible (403) on 6 Nov 2026; no figures used)
• 1 percentage point TER gap, ₹6,00,000 balance, ₹5,000 SIP, ₹6,000 a year — Spendzie illustration with assumed figures, not data for any real fund
• Last verified: 6 Nov 2026; re-checked 7 Nov 2026.
• Researched and verified by the Spendzie editorial desk on 6 November 2026. Figures may change; we will update this post if they do.

Disclaimer

This article is general information only and is not financial, investment, tax or legal advice. Spendzie is not a bank, lender, SEBI-registered investment adviser or research analyst, and does not give loans or investment advice. Brand and scheme names are used for identification only. Nothing here is a recommendation to buy, sell, hold or switch any mutual fund or plan. Always verify details with official sources before acting.