Revised Mutual Fund Fee Structure

This is further to last post on revised charges for mutual funds schemes by ICICI direct, post the SEBI regulation effective August 1, 2009.

Most customers have appreciated the benefit that they tangibly see in their offer. Even so, a few customers, who have relatively smaller investments in SIPs, have expressed concerns.

From what we have understood, they seem to be saying that if their investments in mutual funds are large, then ICICI Direct is giving a very sweet deal. But when investments are in small SIPs, the charges appear expensive.

In the meantime, they want to reassure their customers, by offering revised set of charges for SIPs and liquid funds.

Thus in case of SIPs, they would now charge Rs. 30/- per transaction or 1.5% of the transaction amount, whichever is lower. This would be effective retrospectively from August 1, 2009.

Revised ICICI Direct Structure

If the cumulative MF holdings you have is Rs. 8 lakhs or more, you actually pay NOTHING. Therefore, No changes made to such type of investments

If the cumulative MF holdings you have is less than Rs. 8 lakhs, you only pay nominal charges on each transaction. Please do find the details below

Mutual Funds – Fee Structure Rs. per transaction
For SIPs 30 or 1.5% whichever is lower
For Lumpsum investments 100

The "cumulative value" will be taken as per Value at NAV of your entire MF holdings, at the time of order placement, as seen on your MF Unit Holdings page. Transaction charges will be applied as per the new fee structure, accordingly.

On Investing… Entry Load Transaction Fee Net Savings
  Old Structure New Structure New Structure ( % )
Rs. 500/- as a monthly SIP for 12 months 135 90 33%
Rs. 1,000/- as a monthly SIP for 12 months Mutual Fund 270 180 33%

To elaborate a little bit, let us take a small example:

If you have a SIP of Rs. 500/-, then what you were typically paying as entry load at 2.25% was Rs. 11.25/-. Under the revised charges of 1.5%, you pay Rs. 7.50/-, which is 33.3% lower than your previous charges.

Moreover, the charges on liquid funds, would be zero.

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