Mutual Funds With the Lowest Expense Ratio in India (2026)
Live · updated 2026-09-16 Ranked by data, refreshed from daily NAVs
Cost compounds against you forever, so these are the cheapest Direct-plan schemes with real assets (AUM above ₹500 crore), sorted by expense ratio. This page is recomputed from NAV data every day, so it cannot go stale, and every fund on it links to a full research page with returns, risk, SIP outcomes, holdings and manager track record.
The expense ratio is the one return you are guaranteed: a negative one, charged every year regardless of performance. Its damage compounds quietly - ₹10 lakh growing at 12% for 20 years ends at roughly ₹86 lakh in a fund charging 0.5%, but about ₹71 lakh at 1.5%. Same growth, same years, ₹15 lakh gone to a single percentage point of fees.
This list shows the cheapest Direct-plan schemes with real assets behind them. You will notice index funds dominate - that is not an accident, it is the structural cost advantage of not paying for stock-picking. Cheapness alone is not quality: a cheap fund tracking the wrong index for your needs is still wrong. Use this list to notice what low-cost investing looks like, then check each fund's page for what it actually holds.
Tap any column heading to sort. Every fund name links to its full review.
| # | Fund | RS | King | 3M | 6M | 1Y | 3Y CAGR | 5Y CAGR | 10Y CAGR | Sharpe | Roll 3Y | Worst fall |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Axis Multi-Asset Active FoF | n/a | n/a | 1.8% | 6.6% | n/a | n/a | n/a | n/a | n/a | n/a | -8.6% |
| 2 | BHARAT Bond FOF- April 2031 | 31 | 52 | 0.2% | 1.9% | 4.1% | 7.1% | 6.2% | n/a | 0.18 | 6.6% | -3.8% |
| 3 | Bharat Bond FOF - April 2030 | 34 | 53 | 0.7% | 2.4% | 4.5% | 7.1% | 6.3% | n/a | 0.2 | 6.6% | -4.8% |
| 4 | HDFC Income Plus Arbitrage Active FOF | 52 | 45 | 1.4% | 2.8% | 5.7% | 8.5% | 10.2% | 11.2% | 0.39 | 13.0% | -23.1% |
| 5 | BHARAT Bond ETF FOF - April 2032 | 33 | 54 | 0.7% | 2.2% | 4.4% | 7.2% | n/a | n/a | 0.21 | 7.9% | -4.1% |
| 6 | BHARAT Bond ETF FOF - April 2033 | 36 | 53 | 0.9% | 2.4% | 4.4% | 7.3% | n/a | n/a | 0.16 | 7.7% | -4.3% |
| 7 | Bandhan Income Plus Arbitrage Active FOF | 59 | 63 | 1.4% | 3.2% | 6.1% | 7.4% | 6.2% | 7.1% | 0.96 | 7.7% | -3.0% |
| 8 | Nippon India Gold Savings Fund | 83 | 66 | 0.6% | -2.4% | 36.7% | 35.4% | 25.1% | 15.9% | 1.47 | 10.0% | -24.7% |
| 9 | BANDHAN Overnight Fund | 87 | 83 | 1.3% | 2.6% | 5.3% | 6.1% | 5.7% | n/a | -1.65 | 5.2% | 0.0% |
| 10 | Baroda BNP Paribas Overnight Fund | 94 | 87 | 1.3% | 2.6% | 5.4% | 6.1% | 5.7% | n/a | -1.46 | 5.3% | 0.0% |
| 11 | HSBC Overnight Fund | 87 | 84 | 1.3% | 2.6% | 5.3% | 6.1% | 5.7% | n/a | -1.63 | 5.4% | 0.0% |
| 12 | LIC MF Overnight Fund | 90 | 83 | 1.3% | 2.6% | 5.3% | 6.1% | 5.7% | n/a | -1.66 | 5.5% | 0.0% |
| 13 | Axis Income Plus Arbitrage Active FOF | 56 | 62 | 1.4% | 3.0% | 6.0% | 7.8% | 6.6% | n/a | 0.71 | 6.5% | -2.8% |
| 14 | Navi Nifty 50 Index Fund | 15 | 38 | -2.1% | -1.6% | -6.7% | 5.8% | 6.7% | n/a | -0.04 | 13.1% | -16.6% |
| 15 | Navi Total Stock Market US Specific Equity Passive FoF | 77 | 77 | 1.6% | 17.4% | 25.2% | 25.7% | n/a | n/a | 1.09 | 23.2% | -20.0% |
This list returns: 1 month to 10 years𝕏 Share this statWhatsApp
Over the last 1 year, the funds on this list averaged 6.2% - the best, Nippon India Taiwan Equity Fund, returned 112.8% while the weakest managed -19.4%. That spread is why picking within the funds on this list matters. Over 10 years the average compounding rate is 11.9% a year, which turned ₹1 lakh into about ₹307,800.
| Period | Average | Median | Best fund | Weakest |
|---|---|---|---|---|
| 1 month | -2.5% | -2.9% | Mirae Asset S&P 500 Top 50 ETF Fund of Fund (18.1%) | -8.4% |
| 3 months | 1.1% | 1.2% | Motilal Oswal Digital India Fund (29.2%) | -13.9% |
| 6 months | 7.4% | 4.4% | Mirae Asset NYSE FANG + ETF Fund of Fund (47.1%) | -9.3% |
| 1 year | 6.2% | 5.0% | Nippon India Taiwan Equity Fund (112.8%) | -19.4% |
| 3 years (CAGR) | 12.6% | 10.4% | Nippon India Taiwan Equity Fund (58.2%) | -3.6% |
| 5 years (CAGR) | 10.7% | 9.9% | Mirae Asset NYSE FANG + ETF Fund of Fund (34.0%) | 3.0% |
| 10 years (CAGR) | 11.9% | 12.3% | Nippon India Small Cap Fund (20.9%) | 5.4% |
Averages across every qualifying fund, refreshed daily. Best-fund links open that fund's full review.
What ₹1 lakh became
The same returns, translated into money - at the average pace and at the best fund's pace:
| Held for | Average pace | ₹1 lakh → (average) | ₹1 lakh → (best fund) |
|---|---|---|---|
| 1 year | 6.2% a year | ₹106,200 | ₹212,800 |
| 3 years | 12.6% a year | ₹142,800 | ₹395,900 |
| 5 years | 10.7% a year | ₹166,200 | ₹432,000 |
| 10 years | 11.9% a year | ₹307,800 | ₹667,200 |
Pre-tax, from historical returns. The averages smooth over a very bumpy ride - see the worst-fall column in the ranking above for what the journey involved.
This list by the numbers
| Funds that qualify | 823 |
| Combined assets | ₹6,053,794 Cr |
| Average 3-year return | 12.6% a year (best 58.2%, weakest -3.6%) |
| Average 5-year return | 10.7% a year |
| Average worst-ever fall | -23.0% (deepest: -98.4%) |
| Average expense ratio (Direct) | 0.61% |
| Largest fund by assets | Parag Parikh Flexi Cap Fund (₹141,446 Cr) |
Put the risk number in rupees: at the average worst fall of -23.0%, ₹1 lakh temporarily becomes about ₹77,000. That is the stretch every ranked fund's investors had to sit through at some point - the ranking rewards the funds that made that wait worthwhile.
Momentum check: what is hot right now
As of 2026-09-16, 163 of the 823 funds here rate RS 90 or above (top-decile recent momentum versus peers). The strongest momentum belongs to Motilal Oswal Focused Fund (RS 99/99). Average return over the last 3 months: 1.1%; over 6 months: 7.4%. Momentum is a snapshot, not a ranking criterion here - but it tells you whether this corner of the market is currently in favour.
Before you pick a low-cost fund: four checks
- Compare cost within a category: a 0.2% index fund and a 0.7% active fund are different products, not a price race.
- For index funds, check tracking difference on the fund page - a cheap fund that tracks poorly gives the saving back.
- Make sure you are looking at the Direct plan - the same fund's Regular plan quietly charges more for identical management.
- Cheap is a tiebreaker, not a thesis: pick the right category first, then the cheapest good fund inside it.
Screen the whole universe by expense ratio, tracking record and size - Direct plans only - and see exactly what a cheaper fund would have been worth over ten years.
How to read the table
RS (1-99) is recent momentum versus category peers - 99 is the hottest right now. King (0-100) is the long-term quality composite this list is ranked by. 3M/6M are recent returns; 3Y and 5Y CAGR are annualised longer records. Sharpe is return earned per unit of volatility - higher means smoother compounding. Roll 3Y is the median of every 3-year holding period in the fund's history, the fairest single return number a fund has. Worst fall is the deepest peak-to-bottom loss ever - the number that tests whether you would have stayed invested. Missing values show as n/a, usually because the fund is too young for that measurement.
The top 10, decoded
- Axis Multi-Asset Active FoF (FoF Domestic) - see its page for the full numbers.
- BHARAT Bond FOF- April 2031 (FoF Domestic) - King Score 52/100, RS 31/99 right now. 3-year return 7.1% a year, against a worst-ever fall of 3.8% (₹1 lakh briefly ₹96,200). 5-year pace 6.2% a year, median 3-year rolling return 6.6%, sharpe 0.18.
- Bharat Bond FOF - April 2030 (FoF Domestic) - King Score 53/100, RS 34/99 right now. 3-year return 7.1% a year, against a worst-ever fall of 4.8% (₹1 lakh briefly ₹95,200). 5-year pace 6.3% a year, median 3-year rolling return 6.6%, sharpe 0.2.
- HDFC Income Plus Arbitrage Active FOF (FoF Domestic) - King Score 45/100, RS 52/99 right now. 3-year return 8.5% a year, against a worst-ever fall of 23.1% (₹1 lakh briefly ₹76,900). 5-year pace 10.2% a year, median 3-year rolling return 13.0%, sharpe 0.39.
- BHARAT Bond ETF FOF - April 2032 (FoF Domestic) - King Score 54/100, RS 33/99 right now. 3-year return 7.2% a year, against a worst-ever fall of 4.1% (₹1 lakh briefly ₹95,900). Median 3-year rolling return 7.9%, sharpe 0.21.
- BHARAT Bond ETF FOF - April 2033 (FoF Domestic) - King Score 53/100, RS 36/99 right now. 3-year return 7.3% a year, against a worst-ever fall of 4.3% (₹1 lakh briefly ₹95,700). Median 3-year rolling return 7.7%, sharpe 0.16.
- Bandhan Income Plus Arbitrage Active FOF (FoF Domestic) - King Score 63/100, RS 59/99 right now. 3-year return 7.4% a year, against a worst-ever fall of 3.0% (₹1 lakh briefly ₹97,000). 5-year pace 6.2% a year, median 3-year rolling return 7.7%, sharpe 0.96.
- Nippon India Gold Savings Fund (FoF Domestic) - King Score 66/100, RS 83/99 right now. 3-year return 35.4% a year, against a worst-ever fall of 24.7% (₹1 lakh briefly ₹75,300). 5-year pace 25.1% a year, median 3-year rolling return 10.0%, sharpe 1.47.
- BANDHAN Overnight Fund (Overnight Fund) - King Score 83/100, RS 87/99 right now. 3-year return 6.1% a year, against a worst-ever fall of 0.0% (₹1 lakh briefly ₹1 lakh). 5-year pace 5.7% a year, median 3-year rolling return 5.2%, sharpe -1.65.
- Baroda BNP Paribas Overnight Fund (Overnight Fund) - King Score 87/100, RS 94/99 right now. 3-year return 6.1% a year, against a worst-ever fall of 0.0% (₹1 lakh briefly ₹1 lakh). 5-year pace 5.7% a year, median 3-year rolling return 5.3%, sharpe -1.46.
Frequently asked questions
Which is the best low-cost fund right now?
On our data-driven ranking as of 2026-09-16, Axis Multi-Asset Active FoF scores highest. That is a description of its record versus peers, not a recommendation - rankings move as NAVs update, and the right fund depends on your goals and risk tolerance.
Is a lower expense ratio always better?
Between two funds doing the same job, yes - relentlessly so, because fees compound. Across different jobs, no: a 0.1% index fund and a 0.6% active small cap fund are different products, not a price comparison. Compare costs within a category, and treat any active fund charging index-fund-adjacent fees as worth a closer look.
Why are these all Direct plans?
Direct plans skip the distributor commission baked into Regular plans - same fund, same manager, lower fee, and the difference compounds in your favour every year. There is rarely a good reason for a self-directed investor to hold a Regular plan; the average expense on this list is 0.61%.
What is the average 1-year return of low-cost funds right now?
As of 2026-09-16, the 801 qualifying funds averaged 6.2% over the last year (median 5.0%). The best, Nippon India Taiwan Equity Fund, returned 112.8%; the weakest returned -19.4%. One year is weather, not climate - check the 5 and 10 year columns before drawing conclusions.
Which low-cost fund gave the highest return in the last 10 years?
Nippon India Small Cap Fund leads with 20.9% a year over 10 years - ₹1 lakh became about ₹667,200 pre-tax. The average across funds with a 10-year record is 11.9% a year. A decade-long record says a lot about the past and nothing certain about the next decade.
How is this list ranked?
Schemes with AUM above ₹500 crore sorted by Direct-plan expense ratio, cheapest first. The full formulas are public - see our methodology page. No fund pays to be here and rankings cannot be bought.
Should I invest in the #1 fund on this list?
We cannot tell you that - MF Terminal is descriptive research, not investment advice. A top rank says the past record was strong versus peers. Read the fund's full page, check the drawdowns you would have to sit through, and decide against your own horizon.
More rankings
Sort 8,000 funds by what they actually cost
Screen the whole universe by expense ratio, tracking record and size - Direct plans only - and see exactly what a cheaper fund would have been worth over ten years.
- 8,000+ funds, updated daily
- Candlestick charts & RS Rating
- Point-in-time backtesting
- Portfolio Doctor on your CAS
All figures pre-tax, from AMFI NAV history. Rankings are descriptive and change with the data. Nothing here is investment advice or a recommendation to buy, sell or hold any fund. Past performance does not guarantee future returns.