Expense Ratio
The annual fee a mutual fund charges to manage your money.
The expense ratio is the 'service charge' on your investment, expressed as a percentage of your money per year. A 1% expense ratio means you pay ₹100 a year for every ₹10,000 invested. It sounds small, but because it's charged every year, low fees quietly compound in your favour over decades.
Example
An index fund with a 0.2% expense ratio is far cheaper to hold than an active fund charging 1.5% — a gap that adds up over 20 years.