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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

SIP vs STP vs SWP

In mutual funds, investors often hear three important terms - SIP, STP and SWP. These may sound technical, but they are actually simple and powerful facilities provided by mutual funds. They help investors invest, transfer and withdraw money in a disciplined and automated manner. Systematic Investment Plan This is the most commonly known concept. In an SIP, a fixed amount is automatically debited from your bank account on a fixed date and invested into selected mutual fund schemes. For...

SIP vs STP vs SWP

In mutual funds, investors often hear three important terms - SIP, STP and SWP. These may sound technical, but they are actually simple and powerful facilities provided by mutual funds. They help investors invest, transfer and withdraw money in a disciplined and automated manner. Systematic Investment Plan This is the most commonly known concept. In an SIP, a fixed amount is automatically debited from your bank account on a fixed date and invested into selected mutual fund schemes. For example, if a 30-year-old investor starts investing INR 10,000 per month for retirement and continues till the age of 55, the investment period is 25 years. Assuming a long-term return of around 12% per annum, this monthly investment can grow to approximately INR 1.70 crores. Please note, INR 10,000 is only a small amount used for illustration. Your SIP amount should be sufficient for your goals. Ideally, investors should try to invest at least 30% of their in-hand monthly income. The biggest benefit of SIP is discipline. You do not have to remember to invest every month. The process is automated. SIP also helps you invest through market ups and downs, reducing the stress of timing the market. That is why SIP is also popularly called Sapna-In-Progress. Systematic Transfer Plan In SIP, money moves from your bank account to a mutual fund. In STP, money moves from one mutual fund scheme to another. This is especially useful when you have a lumpsum amount but do not want to invest it into equity funds in one shot. For example, an investor has INR 20 lakhs to invest for the long term. He may worry about market volatility if the entire amount is invested at one go. In such a case, the money can first be parked in a debt mutual fund, and then gradually transferred to an equity mutual fund through STP. For example, INR 40,000 can be transferred every week over around 50 weeks. STP is flexible in terms of duration, frequency, amount and choice of schemes. STP gives comfort, automation and gradual participation in equity markets. Systematic Withdrawal Plan This is the exact reverse of SIP. In SIP, money goes from your bank account to a mutual fund. In SWP, money comes from your mutual fund to your bank account at regular intervals. SWP can be very useful after retirement. Suppose an investor has built a corpus of around INR 10 crores by the age of 55. He can set up an SWP to receive, say, INR 5 lakhs per month for his regular expenses. If the corpus is invested wisely with proper asset allocation, the investor can receive regular income and still allow the balance corpus to grow over time. To understand the power of this, consider an actual scheme’s past performance. A corpus of INR 10 crores would have grown to around INR 30 crores over 15 years, even after the investor withdrew INR 5 lakhs every month. In simple words, SIP helps you invest regularly, STP helps you transfer wisely, and SWP helps you withdraw systematically. Used properly, these three tools can make wealth creation and retirement planning more disciplined, automated and peaceful. (The author is Chartered Accountant and CFA (USA). Financial advisor. Views personal. He could be reached on 9833133605)

Rajnath reviews security situation

  • PTI
  • May 9, 2025
  • 2 min read

New Delhi: Defence Minister Rajnath Singh on Friday carried out a comprehensive review of the national security scenario with the top military leadership, a day after Pakistan's attempts to target Indian military installations were repelled.


Every aspect of the evolving security situation was discussed in the meeting, it is learnt.


The meeting was attended by Chief of Defence Staff Gen Anil Chauhan, Army Chief Gen Upendra Dwivedi, Air Chief Marshal A P Singh, Navy Chief Admiral Dinesh K Tripathi and Defence Secretary Rajesh Kumar Singh.


India on Thursday night neutralised Pakistan military's attempt to hit military stations in Jammu, Pathankot, Udhampur and some other locations with missiles and drones.


"Defence Minister Rajnath Singh chaired a high-level meeting to review the security situation along the western border and operational preparedness of the Indian armed forces," a defence ministry spokesperson said.


After the Pakistani attempts were foiled last night, the defence ministry said India remains "fully prepared to defend its sovereignty and ensure the safety of its people." Indian military officials said the Pakistani drones and missiles were effectively engaged by Indian armed forces and the attempts by the enemy were thwarted.


Pakistan's fresh attempts to target Indian military installations came less than 24 hours after a similar attempt.


The target

On Thursday afternoon, the defence ministry said Indian armed forces foiled Pakistan's attempts to target military installations in 15 cities in the northern and western parts of the country using missiles and drones.


It said the Pakistani military attempted on Wednesday night to target Awantipura, Srinagar, Jammu, Pathankot, Amritsar, Kapurthala, Jalandhar, Ludhiana, Adampur, Bhatinda, Chandigarh, Nal, Phalodi, Uttarlai, and Bhuj.


Defence Minister Singh on Thursday said no limit will become an obstacle to protect India's sovereignty and the nation is fully prepared for such responses.


The Indian armed forces on early Wednesday carried out missile strikes on nine terror targets in Pakistan-occupied Kashmir (PoK) and Pakistan under Operation Sindoor in response to the Pahalgam terror attack.


Amit Shah reviews security

New Delhi: Union Home Minister Amit Shah on Friday reviewed the prevailing situation along India's border with Pakistan and airports in the country amid the military conflict between the two countries, sources said.


The meeting came hours after the Border Security Force said it has foiled an infiltration bid from across the International Border in Jammu, killing at least seven terrorists and destroying a Pakistan Rangers post.


Apart from reviewing the security situation along the India-Pakistan border, Shah also took stock of the steps taken to beef up security at airports across the country, the sources said.


While the BSF guards the India-Pakistan border, the Central Industrial Security Force (CISF) protects the airports in the country, Metro networks and other vital installations.


Those who attended the meeting included Union Home Secretary Govind Mohan, Director of Intelligence Bureau Tapan Deka, Directors General of the BSF, CISF and the Bureau of Civil Aviation Security.


There has been heightened tension between India and Pakistan following India's strike on multiple locations in Pakistan and Pakistan-occupied Kashmir on Wednesday and Pakistan's attempts to hit Indian military sites on Thursday, which were thwarted by the Indian armed forces.

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