Question
What is the difference between growth and IDCW (dividend) mutual-fund options?
Answer
Bottom line: Growth reinvests and compounds your money; IDCW pays out periodically and the payout is taxable.
1. Growth
Gains stay invested, so the NAV rises and you are taxed only on redemption.
2. IDCW
Pays a distribution taxable at your slab, with 10% TDS above ₹5,000; the NAV falls by the payout.
3. For the long term
Growth is usually the cleaner choice for compounding.
Project growth with our SIP Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.