SIP / STP / SWP
SIP - Systematic Investment Plan
A Systematic Investment Plan (SIP) is a vehicle offered by mutual funds to help you save regularly. An SIP means you commit yourself to invest a fixed amount regularly for a predefined period. An SIP allows you to take part in the stock market by averaging out on the market fluctuations.
A Systematic Investment Plan (SIP) is a vehicle offered by mutual funds to help you save regularly. An SIP means you commit yourself to invest a fixed amount regularly for a predefined period. An SIP allows you to take part in the stock market by averaging out on the market fluctuations.
It makes you disciplined in your savings and it helps you make money over the long term enabling individual to meet future goals and Invest disposable funds – that might otherwise lie in Savings accounts, earning low interest and letting inflation eat into them.
SWP - Systematic Withdrawal Plan
A service offered by a mutual fund that provides a specific payout amount to the shareholder at predetermined intervals, generally monthly, quarterly, semi-annually or annually.
SWP - Systematic Withdrawal Plan
A service offered by a mutual fund that provides a specific payout amount to the shareholder at predetermined intervals, generally monthly, quarterly, semi-annually or annually.
Three main reasons for using SWPs are
1. To meet living requirements (usually when retired)
1. To meet living requirements (usually when retired)
2. For tax planning purposes
3. To comply with mandatory retirement plan withdrawal rules after reaching age.
STP - Systematic Transfer Plan
While investing in a debt fund normally assures you of fairly consistent returns, equities have the potential to create wealth. But the unpredictability in equity funds can be quite a deterrent when you make a choice. To combine the best of both worlds, STP is used. Investors who want to invest lump sum money in schemes with stable returns and ensure small exposure to equity schemes in order to avail of the potential for higher growth through equities.
Invest a lump sum amount in a debt-oriented scheme (Debt schemes can be either 100% debt or High Debt and Low equity). Specify a desired amount to be transferred to any equity schemes of the same AMC. This works like a SIP (Systematic Investment Plan). Lowering Risk and increasing returns. This is best suited when markets have peaked or the investor is unsure of the further uptrend in the market.
3. To comply with mandatory retirement plan withdrawal rules after reaching age.
STP - Systematic Transfer Plan
While investing in a debt fund normally assures you of fairly consistent returns, equities have the potential to create wealth. But the unpredictability in equity funds can be quite a deterrent when you make a choice. To combine the best of both worlds, STP is used. Investors who want to invest lump sum money in schemes with stable returns and ensure small exposure to equity schemes in order to avail of the potential for higher growth through equities.
Invest a lump sum amount in a debt-oriented scheme (Debt schemes can be either 100% debt or High Debt and Low equity). Specify a desired amount to be transferred to any equity schemes of the same AMC. This works like a SIP (Systematic Investment Plan). Lowering Risk and increasing returns. This is best suited when markets have peaked or the investor is unsure of the further uptrend in the market.
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