Investment Plans: If you are planning an investment, read this article first. Over the years, Mutual Funds and FD are an excellent option for investment. Because it has less risk than direct investment in the stock market. Under mutual funds, your money is invested by the fund manager. Additionally, risk can be reduced by investing in hybrid and debt funds. You get the option to invest in mutual funds in three ways. These include SIP, STP and SWP. Understand the difference between these three.
What is SWP?
SWP is a method of investing in mutual funds similar to SIP. SWP is also called a Systematic Withdrawal Plan. To invest in it, you have to deposit a lump sum amount. Additionally, you have the opportunity to earn a monthly income, along with benefits from mutual funds.
What is STP?
STP is called the Systematic Transfer Plan. It protects you from market risks. This allows you to transfer your money from the equity fund to the debt fund. You can decide to transfer this money according to your convenience.
What is SIP?
SIP is also known as a Systematic Investment Plan. Under this, you can invest in mutual funds in instalments. Additionally, it can be paused at any time. At the same time, the investment amount and period can be increased. Through SIP, you can invest in any type of mutual fund, including equity, hybrid, and debt. However, the returns on this investment depend on market fluctuations. You can withdraw some amount of money invested in SWP every month. Some amount is invested in the stock market. On which you get a good return.
Which is the best option?
Which is better among SIP, SWP and STP? It depends on your investment needs. Typically, investors opt for SIPS when investing in mutual funds.
Disclaimer: For any financial investment anywhere on your own responsibility, Times Bull will not be responsible for it.