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Sunday, June 26, 2016

Mutual Fund Investment- How Systematic transfer plan - STP works?

Mutual Fund Investment- How Systematic transfer plan - STP works?

Systematic transfer plan - STP works like systematic investment plans (SIPs). Just that, in a STP, an investor typically puts in a lump sum amount into a liquid fund & then systematically transfers it into an equity mutual fund.

In an SIP, the instalments are transferred directly from the investor's bank account to the fund.

So, if you have Rs. 1 lakh to invest, it first goes into a liquid fund. From the liquid fund, every week or /  month, a fixed sum (say Rs. 4,000 per week or Rs. 16,000 per month) is invested into an equity fund.

The residual amount in the liquid fund continues to earn interest, while the investment into equities is staggered over a period of time.
Amol Joshi, Founder,
Plan Rupee, Mumbai

“Systematic transfer plan staggers your investment, helps you tide over volatility and avoid market peaks,“ says Amol Joshi, Founder, Plan Rupee, a Mumbai based wealth manager.

Plan Rupee
Mutual Fund Investment- How Systematic transfer plan - STP works? Reviewed by S. Chitra on June 26, 2016 Rating: 5 Mutual Fund Investment- How Systematic transfer plan - STP works? Systematic transfer plan - STP works like systematic investment plans...

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