They say,
An SIP is a simple, convenient and disciplined way to meet your financial goals.
It allows you to make the most of the growth potential of Mutual Funds.
Just like they say,
Systematic Transfer Plan is one way of using this philosophy.
An STP entails moving a fixed amount of money every interval from one mutual fund scheme to another. This facility is generally preferred when funds are transferred from a debt scheme (relatively low risk) into an equity scheme (high risk).
Walter Bagehot once said,
And what better if this dividend can be further invested to make more money. Dividend Transfer Plan runs on this philosophy.
A DTP is a facility where the dividend declared in one mutual fund scheme is transferred as an investment to another scheme of the same mutual fund house.
In essence, Systematic Withdrawal Plan (SWP) is the reverse of Systematic Investment Plan (SIP)
While SIP allows you to make regular investments, SWP allows you to withdraw a pre-defined amount at fixed intervals from the amount you invested in Mutual Funds for growth. The amount to be withdrawn and its frequency is determined by the investor.
