Enter your SIP or lump sum, the return before costs and two expense ratios. This expense ratio impact calculator shows how much a small fee difference changes your final corpus.
Expense Ratio Impact Calculator
Compare two funds with the same return before costs but different expense ratios.
Fund A vs Fund B
| At the end of the tenure | Fund A | Fund B |
|---|
How the gap grows over time
| Year | Fund A (₹) | Fund B (₹) | Gap (₹) |
|---|
Illustrative estimates. The expense ratio is subtracted from the return. Actual returns vary and are not guaranteed.
A 1% gap in expense ratio sounds like nothing. On a ₹10,000 SIP over 20 years at 12% before costs, it quietly takes about ₹11.64 lakh out of your corpus. An expense ratio impact calculator makes that invisible fee visible.
How do you use this expense ratio impact calculator?
- Enter your monthly SIP, a lump sum, or both.
- Set how many years you will stay invested.
- Enter the return you expect before any fund costs. Pick a number you can defend, not the highest one you have heard.
- Enter the expense ratio of Fund A and Fund B. Use the total expense ratio from each scheme’s factsheet.
- Press Calculate, then read the gap, the comparison table and the year-by-year gap. Use Copy result to save a summary.
Stock Charcha built this expense ratio impact calculator to hold everything equal except the fee, so the gap you see comes only from cost.
How does the expense ratio impact calculator work out the result?
A fund deducts its expense ratio from the NAV every day, so you never receive a separate bill. The calculator therefore subtracts the expense ratio from your return and compounds the rest monthly, with each instalment invested at the start of the month.
Corpus = P × [((1 + i)n − 1) ÷ i] × (1 + i), where i = (return − expense ratio) ÷ 12 ÷ 100
Subtracting the fee is a close approximation of how the daily deduction compounds. The gap between the two funds is simply the difference between their two corpuses.
What does a worked example look like?
Take a ₹10,000 SIP for 20 years at an illustrative 12% before costs. Fund A charges 0.5% and Fund B charges 1.5%.
| At the end of 20 years | Fund A (0.5%) | Fund B (1.5%) |
|---|---|---|
| Total invested | ₹24,00,000 | ₹24,00,000 |
| Estimated corpus | ₹93,39,666 | ₹81,75,968 |
| Lost to expenses | ₹6,51,813 | ₹18,15,511 |
Fund A ends about ₹11.64 lakh ahead, which is roughly 14% more, on the same money. These figures are illustrative, not a promise.
How much does each extra bit of expense ratio cost?
Here is the same SIP at different expense ratios, with “lost to expenses” measured against a fund that charged nothing.
| Expense ratio | Estimated corpus | Lost to expenses |
|---|---|---|
| 0.25% | ₹96,59,344 | ₹3,32,135 |
| 0.5% | ₹93,39,666 | ₹6,51,813 |
| 1% | ₹87,35,731 | ₹12,55,749 |
| 1.5% | ₹81,75,968 | ₹18,15,511 |
| 2% | ₹76,56,969 | ₹23,34,510 |
The loss climbs steadily, but each extra step costs slightly less than the one before, because a smaller corpus has less left to compound. Even so, a 2% fund ends about 23% below a no-cost fund.
Why does the gap grow so fast over time?
The fee is charged every year on a bigger and bigger balance. Here is the gap between Fund A and Fund B at different points of the same SIP.
| Year | Fund A | Fund B | Gap |
|---|---|---|---|
| 5 years | ₹8,13,572 | ₹7,91,555 | ₹22,016 |
| 10 years | ₹22,55,442 | ₹21,26,594 | ₹1,28,847 |
| 20 years | ₹93,39,666 | ₹81,75,968 | ₹11,63,698 |
| 30 years | ₹3,15,90,844 | ₹2,53,84,195 | ₹62,06,649 |
The gap at 30 years is about 48 times the gap at 10 years. Time magnifies a small fee, just as it magnifies a small return.
Does a lump sum change the picture?
A lump sum feels the fee for the full period. Invest ₹10,00,000 once for 20 years at the same 12% before costs, and Fund A reaches ₹98.66 lakh against ₹80.92 lakh for Fund B. The expense ratio impact calculator shows a gap of about ₹17.74 lakh.
Which expense ratio should you compare?
Since 1 April 2026, SEBI’s mutual fund rules separate a base expense ratio from brokerage and levies. What the scheme costs you is still the total expense ratio, so compare that figure for the exact scheme and plan on its factsheet or on AMFI.
Direct plans carry no distribution commission and should cost less than regular plans of the same scheme. Check the figure as of today, because fund houses update it. Stock Charcha’s rule of thumb is to compare schemes within the same category and plan type.
What does this expense ratio impact calculator leave out?
It assumes both funds earn the same return before costs, which is the point of the test. In real life a costlier fund can still outperform, so a low expense ratio is one factor, not a promise of better returns. It also ignores capital gains tax and exit loads.
The result is a planning estimate, not a prediction. Mutual fund investments are subject to market risks. Read all scheme related documents carefully before investing. At Stock Charcha we would rather show a cautious number than a flattering one.
Where should you go after using the expense ratio impact calculator?
To see where low-cost options sit, read about the types of mutual funds and compare ETFs and mutual funds. If SIPs are new to you, start with what is SIP in mutual funds.
Want to see how raising your SIP changes the picture? Try our step-up SIP calculator. Then rerun the expense ratio impact calculator with your own two schemes.
Founder of Stock Charcha. Stock market enthusiast, actively investing since November 2022. About the author
Educational content only. This page is not personalised financial advice. Please do your own research or speak to a SEBI-registered adviser before investing, and read our disclaimer.
Frequently asked questions
What is a good expense ratio for a mutual fund?
There is no single good number, because costs differ by category. Index funds and ETFs generally charge less than actively managed funds. Compare the total expense ratio of schemes in the same category, and check the exact plan you will buy.
Is a direct plan better than a regular plan?
Both hold the same portfolio. A direct plan has no distributor commission, so its expense ratio is lower, and that saving compounds. A regular plan may include advice or service, so choose based on whether you need that help.
Is the expense ratio charged separately from my account?
No. It is deducted daily from the fund’s NAV, so you never see a bill. That is why the calculator subtracts it from the return instead of treating it as an extra payment from your pocket.
Can a fund with a higher expense ratio still be the better choice?
Yes, if it earns enough extra return to cover the higher fee. The expense ratio impact calculator assumes equal returns before costs, so it shows how much extra return a costlier fund must deliver just to break even.
Is the expense ratio impact calculator result guaranteed?
No. Fund returns vary, and the calculator uses one steady return every year. Treat the figures as a planning estimate and confirm each scheme’s current expense ratio before you invest.