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What is the story about?
Zerodha founder and CEO Nithin Kamath has reiterated the company's commitment to offering direct mutual funds free of charge, saying the platform will continue with the model even as several peers have either exited the segment or shifted their strategy.
In a post on X on July 9, Kamath said Zerodha's pricing philosophy has remained unchanged since it introduced its discount brokerage model in 2010.
He said the company chose to charge a flat fee per trade irrespective of trade size because executing a larger order does not require additional effort.
Kamath said Zerodha followed the same principle while entering the mutual fund business and delayed launching the offering until it could provide only direct mutual fund plans through its Coin platform.
"You can't call yourself a discount or a low-cost broker if you charge a percentage fee on transactions, because there's no incremental effort in executing a larger order," he wrote.
According to Kamath, Coin is now India's largest direct mutual fund platform, managing nearly ₹1.6 lakh crore in direct mutual fund assets under management (AUM). He added that customers on the platform have collectively saved "thousands of crores" in commissions by investing through direct plans.
Kamath also noted that many platforms that launched direct mutual fund offerings around the same time as Coin have either shut down those services or pivoted to other business models. He said some of the remaining platforms are also re-evaluating their decision to offer direct plans.
Despite this, Kamath said Zerodha would continue to provide direct mutual funds free of charge.
He also urged investors to verify whether they are investing through direct or regular mutual fund plans, saying many investors are still unaware of the difference between the two. He added that Zerodha can assist investors who wish to switch from regular to direct plans.
Kamath accompanied the post with a chart comparing the performance of a ₹5,000 monthly SIP in the DSP Large Cap Fund under direct and regular plans.
The illustration showed the direct plan growing to about ₹19.5 lakh, compared with ₹18.3 lakh for the regular plan, with the ₹1.2 lakh gap representing commissions over the investment period, according to the chart.
What are direct and regular mutual fund plans?
Direct and regular plans invest in the same underlying portfolio but differ in costs. Direct plans are bought directly from the asset management company and do not include distributor commissions, resulting in lower expense ratios.
Regular plans include distributor commissions, which are built into the fund's expense ratio. Lower costs can potentially improve long-term returns, although actual returns depend on market performance and the scheme's investment strategy.
In a post on X on July 9, Kamath said Zerodha's pricing philosophy has remained unchanged since it introduced its discount brokerage model in 2010.
He said the company chose to charge a flat fee per trade irrespective of trade size because executing a larger order does not require additional effort.
Kamath said Zerodha followed the same principle while entering the mutual fund business and delayed launching the offering until it could provide only direct mutual fund plans through its Coin platform.
"You can't call yourself a discount or a low-cost broker if you charge a percentage fee on transactions, because there's no incremental effort in executing a larger order," he wrote.
When
we started the discount brokerage (flat fee per trade) model in India in 2010, we decided to charge the same fee regardless of trade size. The logic was simple: if the effort to execute a trade is the same, why should customers pay differently? We applied the same logic to… pic.twitter.com/we0sogPJdY
— Nithin Kamath (@Nithin0dha) July 9, 2026
According to Kamath, Coin is now India's largest direct mutual fund platform, managing nearly ₹1.6 lakh crore in direct mutual fund assets under management (AUM). He added that customers on the platform have collectively saved "thousands of crores" in commissions by investing through direct plans.
Kamath also noted that many platforms that launched direct mutual fund offerings around the same time as Coin have either shut down those services or pivoted to other business models. He said some of the remaining platforms are also re-evaluating their decision to offer direct plans.
Despite this, Kamath said Zerodha would continue to provide direct mutual funds free of charge.
He also urged investors to verify whether they are investing through direct or regular mutual fund plans, saying many investors are still unaware of the difference between the two. He added that Zerodha can assist investors who wish to switch from regular to direct plans.
Kamath accompanied the post with a chart comparing the performance of a ₹5,000 monthly SIP in the DSP Large Cap Fund under direct and regular plans.
The illustration showed the direct plan growing to about ₹19.5 lakh, compared with ₹18.3 lakh for the regular plan, with the ₹1.2 lakh gap representing commissions over the investment period, according to the chart.
What are direct and regular mutual fund plans?
Direct and regular plans invest in the same underlying portfolio but differ in costs. Direct plans are bought directly from the asset management company and do not include distributor commissions, resulting in lower expense ratios.
Regular plans include distributor commissions, which are built into the fund's expense ratio. Lower costs can potentially improve long-term returns, although actual returns depend on market performance and the scheme's investment strategy.
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