Investor Education
Understanding SIP, SWP & STP
SIP, SWP, and STP are structured ways to invest or withdraw from mutual funds over time. Each serves a different purpose depending on your life stage, income pattern, and financial goals.
What is SIP?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount at regular intervals—usually monthly—into a mutual fund. Think of it as a monthly commitment towards building long-term wealth.
- • Promotes disciplined investing regardless of market conditions
- • Helps average out purchase costs over time
- • Suitable for long-term goals like retirement, education, or buying a home
SIPs do not assure returns. Outcomes depend on market performance and the chosen mutual fund scheme.
What is SWP?
A Systematic Withdrawal Plan (SWP) enables you to withdraw a fixed amount from your mutual fund investment at regular intervals, making it useful for generating steady income.
- • Commonly used during retirement for monthly cash flow
- • Complements pensions, rental income, or interest earnings
- • May offer better tax efficiency than traditional fixed deposits in certain situations
Withdrawal amount and frequency must be planned carefully to ensure the investment lasts through your intended time horizon.
What is STP?
A Systematic Transfer Plan (STP) lets you gradually move money from one mutual fund scheme to another—typically from a stable fund to equity.
- • Reduces market timing risk when investing lump sums
- • Often used to transfer from liquid or debt funds into equity over time
- • Best suited when the transfer duration matches your risk comfort
STP does not eliminate market risk. Suitability depends on your goals, risk profile, and the source of funds.
SIP vs SWP vs STP – quick comparison
Investment Flow: Into the Fund
A fixed amount invested at regular intervals. Ideal for individuals with steady income aiming for long-term wealth creation.
Investment Flow: From the Fund
A fixed amount withdrawn periodically. Suitable for retirees or investors seeking a structured income from their corpus.
Investment Flow: Between Funds
Systematic transfer of money from one scheme to another. Helps deploy lump-sum investments into equity in a phased manner.
EXPERT INSIGHTS
Deep dive into SIP, SWP & STP with our expert
Explore comprehensive guides, real-life scenarios, and practical strategies to master systematic investing and withdrawal plans.
SIP FUNDAMENTALS
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A comprehensive guide explaining what SIP is, how it works, its advantages, and when to choose SIP over lump-sum investing.
LONG-TERM WEALTH
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Learn how disciplined SIP investing, even with modest amounts, can create substantial wealth through compounding over time.
GOAL-BASED INVESTING
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Understand how equity SIPs help you plan for multiple financial goals—from short-term purchases to retirement.
SWP FUNDAMENTALS
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RETIREMENT INCOME
Creating a Reliable Source of Post-Retirement Cash Flow
Understand how SWPs in hybrid mutual funds can deliver steady, tax-efficient income throughout retirement.
TAX-SMART INVESTING
SWP for Senior Citizens: Generating Tax-Efficient Income
Learn how senior citizens can use SWPs to receive regular monthly income while optimizing tax efficiency.
STP STRATEGY
STP in Mutual Funds: A Smarter Way to Invest Lump Sum Gradually
Learn how Systematic Transfer Plans help phase lump-sum investments into equity through practical use cases and real-world scenarios.
STP FUNDAMENTALS
Systematic Transfer Plan (STP): Meaning, Benefits, and Use Cases
Understand what STP is, how it works, its advantages, available types, and when using STP makes strategic sense.