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Expense ratio calculator: what a fund’s fee costs over time.

Two funds, same gross return, different expense ratios. The gap at the end is the fee.

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Reference returns, tap to use

Model, back tested, RupeeCase indices

Past or back tested returns are not a promise of future returns.

Cost of the higher expense ratio₹21.1 L
Fund A at 0.10%₹94.8 Lnet 11.90% a year
Fund B at 1.50%₹73.7 Lnet 10.50% a year
Share of the end value lost22.3%
₹0₹25.0 L₹50.0 L₹75.0 L₹1 CrY0Y4Y8Y12Y16Y20
  • Fund A
  • Fund B
Net return = gross return minus the expense ratio, every year, on the whole amount.

01How it works

In plain words.

The expense ratio (TER) is deducted from the fund’s assets every day, so the return you see is already net of it. The calculator takes the gross return, subtracts each fund’s TER and compounds the two net returns.

The formula

Net return = gross return - TERValue = amount x (1 + net)^yearsCost of the higher TER = value A - value B

02Worked example

The default numbers, by hand.

Rs 10 lakh for 20 years at 12% gross: at 0.1% TER the value is about Rs 94.8 lakh; at 1.5% about Rs 73.7 lakh. The 1.4 point difference costs about Rs 21.1 lakh.

InputValue
Amount invested₹10,00,000
Fund A expense ratio0.1%
Fund B expense ratio1.5%
Gross return a year12%
Years20 years
ResultValue
Cost of the higher expense ratio₹21.1 L
Fund A at 0.10%₹94.8 L
Fund B at 1.50%₹73.7 L
Share of the end value lost22.3%

03Key concepts

What to know before you use it.

What the TER pays for

Fund management, administration and, in regular plans, the distributor’s commission. A direct plan of the same fund has no commission, so its TER is lower. SEBI caps the TER by fund type and size.

Small numbers, long horizons

A fee of a percentage point looks small in a year and large over two decades, because it compounds on the whole balance.

Good to know

  • The TER is published in each fund’s factsheet and changes over time.
  • Index funds and ETFs tend to have lower TERs than actively managed funds; tracking error is the other cost to compare for them.
  • Compare funds on the same plan type: direct with direct, regular with regular.

04Assumptions

What the calculator assumes.

  • Same gross return for both funds every year.
  • No exit loads, tax or transaction costs.

Sources, checked 12 Oct 2026

  1. SEBI, total expense ratio limits for mutual fund schemes (Regulation 52, SEBI Mutual Funds Regulations)

05Questions

Asked about the Expense ratio impact.

What is a good expense ratio?

There is no single number. Compare funds of the same category and plan type. Index funds often charge well under 0.5%; active funds charge more.

How much does a 1% expense ratio cost?

On Rs 10 lakh over 20 years at 12% gross, about Rs 16 lakh compared with no fee. Try it with your numbers.

06Keep going

Learn the idea, see it applied.

Module 6.3Mutual Funds: Structure, Types and Hidden Costs8 min read, Path 06Module 6.4ETFs: How They Work and Why They Matter for Systematic Investors8 min read, Path 06Module 11.2Tax Treatment: MFs, ETFs, SGBs, Bonds & F&O9 min read, Path 11The matching indexNifty 50 Equal WeightAll 50 Nifty names, equal weight. The simplest card on the lineup.CAGR16.4%Sharpe1.13Max DD−15.7%Model, back tested, as of 27 Apr 2026. Not client returns, not a promise. Risk band: Moderate.

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Education only, not investment advice. RupeeCase is a technology platform operated by QC Alpha Technologies Pvt Ltd; it is not a fund, a PMS or a SEBI registered investment adviser. Model returns are back tested and not a promise of future returns. Figures carry the date they were checked.