What the expense ratio tells you
The TER is the all-in annual fee, expressed as a percentage of assets. A 1.5% TER means roughly Rs 1,500 a year on a Rs 1 lakh investment — taken out of the NAV daily, not invoiced to you. SEBI caps TERs on a sliding scale that falls as a fund's assets grow.
Why it matters so much
TER compounds against you. The single biggest, most reliable lever is the Direct vs Regular gap:
- Regular plans bundle a distributor commission into the TER.
- Direct plans strip it out, often saving 0.5%-1.0%+ a year.
Over decades that gap can cost lakhs. Model it on our direct-vs-regular cost calculator.
How to read it
- Lower is better, all else equal — and for index funds and ETFs, cost is the main differentiator.
- A high TER is only justified if the fund consistently earns it back as alpha, which most don't.
FindMF takes no commission and surfaces TER from scheme metadata so you can compare honestly. See methodology.