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
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