The Total Expense Ratio (TER) of a Mutual Fund is calculated on a daily basis.
The regulator SEBI has mandated this as such recently and also asked for this to be disclosed on the AMC websites, with the prescribed format as shown below.
As can be seen in #6 above, TERs of Direct Plans of Mutual funds tend to be lesser by 1% to 1.5% as compared to Regular Plans because the former do not carry any distributor commission. This means that direct plan investors can earn upto 40% more in the long run compared to those who go with distributors/banks/broker-apps etc.
