The UPI fee is two rupees. Your fund fee is two thousand

Starting October 15, UPI transactions for merchants will cease to be free. However, individual investors face a more intricate situation.

Investors who move Rs 1 lakh into a mutual fund via UPI will incur a charge of Rs 24. According to Dhirendra Kumar, founder and CEO of Value Research. The fee is borne by the fund house.

Not the investor, unless it is passed on as an expense ratio instead of being absorbed.

The typical flexi-cap fund charges 2.07 per cent a year on its regular plan, amounting to Rs 20,065 for every lakh invested. In contrast, the direct plan of the same fund charges 0.86 per cent, resulting in annual savings of around Rs 14,000.

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The UTI Nifty 50 Index, direct plan, incurs a charge of 0.18 per cent a year, making it one of the lowest in the market. Meanwhile, brokers have been complaining about paying Rs 5 lakh on transfers for margin trades, which could be reduced with the UPI fee hike.

Investors should not stop or time their investments around October 15, advises Kumar. If you hold a regular plan, consider switching to its direct version today. The savings from such a switch can be substantial, with some funds offering savings of six hundred times the UPI fee.

For instance, Rs 24 can save you up to Rs 14,000 in annual fees.

It's worth noting that the message has started. And investors are receiving queries about their SIP costs and whether they should move their lump sum before October 15. However, the answer to all three is no, as the fee does not impact individual investor transactions.

The reason behind this lies in how we judge costs, and it's essential for investors to understand this nuance.

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Furthermore, UPI transactions for individuals will remain free of charge, thanks to the innovative technology that makes it possible for you to invest with ease. It stays free for you, allowing you to focus on your financial goals without any additional fees.

The impact of the UPI fee hike on brokers is also significant. However, this change does not affect individual investor transactions.

Investors should not panic about the upcoming UPI fee hike for merchants and brokers. Instead, they should focus on understanding how the fees work and making informed decisions about their investments.