STP allows investors to manage their risk exposure by gradually shifting from one type of fund to another. Investors benefit from rupee cost averaging as they buy more units when prices are low and fewer units when prices are high.
A few reasons why SIP is important ...
Systematic Transfer Plan (STP) is a strategy that allows investors to transfer a fixed amount from one mutual fund scheme to another in a systematic and periodic manner. STPs allows you to earn higher returns on your investments by shifting to a more profitable venture during market swings. Gaining market advantage in this method maximizes the profits through securities bought and sold in the capital sector.
There are no criteria for a specific amount of money that has to be minimum while investing in a plan. One can invest any amount of money as per his capacity and willingness.
When you will do STP, What you Get?
Make Wealth from STP
Achieve your goal from STP
Retirement plan from STP
Secure your family from STP
How to make good wealth from STP...
Let’s understand how STP works with an example. Suppose an investor has a lump sum amount invested in a debt mutual fund, but they want to take advantage of potential higher returns from an equity mutual fund. Instead of redeeming the entire amount from the debt fund and investing it directly in the equity fund, they can opt for an STP.
In an STP, the investor can specify the amount they want to transfer regularly (usually monthly) from the debt fund to the equity fund. This transfer is done at the prevailing Net Asset Value (NAV) of the debt fund on the date of the transfer. The specified amount is then sold from the debt fund, and the equivalent units are purchased in the equity fund.
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FAQ
While STP is generally considered a long-term strategy, it can be used for specific short-term goals with proper planning.
Yes, you can modify the transfer amount as per your convenience, but it’s essential to maintain consistency.
No, there are typically no restrictions on the number of STP transactions you can make.
A Systematic Investment Plan is better because it has a higher return rate and it starts with lower monthly payments. A Systematic Transfer Plan is a type of investment strategy in which the investor transfers funds from one investment to another regularly. The advantage of the systematic transfer plan over the systematic investment plan is that you have more flexibility when you withdraw funds. With the systematic transfer plan, you can decide to withdraw only some funds at a time, rather than all of them at once.