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AskTheExpert

Difference between SIP and STP

Question: Please give some more info on SIP and STP

   

Answer: The difference between SIP and STP is in the purpose.

SIP (Systematic Investment Plan): One of the ways of investing in stock markets is through SIP. In SIP, you invest a certain amount each month (as low as Rs 100!) into the equity mutual fund of your choice. The SIP amount is debited from your account on specific dates (set by you).

   

STP (Systematic Transfer Plan): Just as SIP, mutual funds let you avail of STP facility. In case of SIP, the amount is debited from your bank account for a new investment, while in case of in STP, the amount is transferred from your bank account. STP allows you to transfer money from one mutual fund scheme into another. For example, the regular income from a Monthly Income Plan (MIP) of a mutual fund can be transferred into a diversified equity fund for better returns. This transfer is enabled by STP.

     

Also, while there is no entry load for SIP, you may have to pay switching charges for STP.

  

Warm regards,

Expert @ InvestmentYogi

Published Mar 17 2010


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Comments

Comments

 

SUSHANT S BIJAM said:

DEAR SIR

I WANT DO INVESTMENT IN SIP OR MIP IN FUTURE BUT I DONT KNOW HOW TO GO ABOUT IT

ALSO PLS. TELL ME THE THE DIFFERENCE BETWEEN SIP AND MIP

January 20, 2011 9:48 PM
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