Systematic plans are tools for investing in mutual funds that help you phase out your purchases and earn better returns.
Here is how you can use them.
Fresh and Regular
SIP expands into Systematic Investment Plan. It is rather like a recurring deposit - a certain amount is debited at regular intervals from your bank account and used to buy units in a fund. An SIP can be either monthly or quarterly. The amount to be invested each month (or quarter), and how long you continue the plan, is up to you.
Into Your Account
Just as you should not jump into equity funds all at once, you should not exit from them abruptly.
For withdrawing all your money from a fund at the wrong time can expose your return to poor timing too.
That is where the SWP (Systematic Withdrawal Plan) comes in.
You withdraw a sum from your fund periodically, and the proceeds flow into your account.
From One to the Other
What if you get a bonus from your employer (or win the lottery!) and want to invest it in funds? Then you should use STP (Systematic Transfer Plan). An STP involves parking your money in one fund (usually a safe option like a liquid or debt fund) and then investing a specific sum at regular intervals in another scheme, usually an equity fund. An STP may also be used to switch a fixed sum or the capital gains you made to another fund.
From India, Ahmadabad
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34Here is how you can use them.
Fresh and Regular
SIP expands into Systematic Investment Plan. It is rather like a recurring deposit - a certain amount is debited at regular intervals from your bank account and used to buy units in a fund. An SIP can be either monthly or quarterly. The amount to be invested each month (or quarter), and how long you continue the plan, is up to you.
Into Your Account
Just as you should not jump into equity funds all at once, you should not exit from them abruptly.
For withdrawing all your money from a fund at the wrong time can expose your return to poor timing too.
That is where the SWP (Systematic Withdrawal Plan) comes in.
You withdraw a sum from your fund periodically, and the proceeds flow into your account.
From One to the Other
What if you get a bonus from your employer (or win the lottery!) and want to invest it in funds? Then you should use STP (Systematic Transfer Plan). An STP involves parking your money in one fund (usually a safe option like a liquid or debt fund) and then investing a specific sum at regular intervals in another scheme, usually an equity fund. An STP may also be used to switch a fixed sum or the capital gains you made to another fund.
From India, Ahmadabad
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Is it necessary to buy SIP? Why not play like a SIP on our own? I used to buy a stock of 10,000 per month, and on any day in the month when the market is down. And this works well for me. For example, in the current month, I bought ABB at 720 and GAIL at 370. 10 shares each, and at the current moment, I am in profit only.
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From India, Mumbai
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New Blog on health - Health Beauty Fitness Health Beauty Fitness
From India, Mumbai
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