Expense Ratio Impact Calculator

What This Calculator Does

A mutual fund's expense ratio is deducted from its returns every year, which means even a small difference in expense ratio compounds into a meaningfully different outcome over a long investment horizon. This calculator shows exactly how much a higher expense ratio - such as a Regular Plan versus a Direct Plan of the same scheme - can cost you over time.

The Formula

The calculator takes your assumed gross return (the fund's performance before fees) and subtracts each expense ratio to get two separate net return rates. It then runs the standard SIP future value formula for both net rates using the same monthly investment and time period, so the only difference between the two outcomes is the expense ratio itself.

How to Use It

Enter your monthly SIP amount, the time period, and the gross return you expect the fund to deliver before fees. Then enter two expense ratios to compare - by default, a low Direct Plan-style ratio and a higher Regular Plan-style ratio. The calculator shows the projected final value under each, and the rupee difference between them.

Why This Difference Gets Bigger Over Time

A 1.4 percentage point gap in expense ratio (a fairly typical Direct-vs-Regular difference) might look small in any single year, but because it is deducted every year from a growing base, the gap compounds - the longer the investment horizon, the larger the final rupee difference between the two options becomes, even though the underlying fund and its gross performance are identical.

Who This Is For

Anyone deciding between a Direct Plan and a Regular Plan of the same fund, or comparing two funds with different expense ratios, who wants to see the long-term rupee cost of that difference rather than just the percentage-point gap.

Quick Example

A ₹10,000 monthly SIP over 20 years at a 13% gross return grows to roughly ₹1,05,50,095 net of a 0.6% expense ratio, but only about ₹87,35,731 net of a 2.0% expense ratio - a difference of nearly ₹18,14,365 from what looks like a small 1.4 percentage point gap on paper.