Definition of TER (Total Expense Ratio)
TER (Total Expense Ratio) is the total annual cost of running a mutual fund scheme, expressed as a percentage of the fund's average daily net assets. It includes the fund management fee, registrar and transfer agent fees, custodian charges, audit fees, SEBI fees, and any other operational costs.
TER is essentially the same as the expense ratio, but the term 'Total Expense Ratio' emphasizes that it includes all costs, not just the fund management fee. SEBI mandates that the TER be disclosed in all fund documents and on AMC websites. As per SEBI's tiered structure, larger funds (higher AUM) must charge lower TERs.
Investors should compare TER across similar fund categories when selecting funds. A lower TER means more of your returns stay in your pocket. Use InvestKit's Expense Ratio Calculator to see the long-term impact of different TER levels on your wealth.