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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)

Ready to 'wrap' tensions if India de-escalates: Asif

  • PTI
  • May 7, 2025
  • 2 min read

By Sajjad Hussain

Islamabad: Pakistan is ready to "wrap up" tensions with India, if New Delhi de-escalates the situation, Defence Minister Khawaja Asif said on Wednesday.


His remarks came hours after India carried out a military strike on terror targets in Pakistan and Pakistan-occupied Kashmir.


Asif was reported as saying by Bloomberg Television that Pakistan will only respond if attacked.


"We have been saying all along in the last fortnight that we'll never initiate anything hostile towards India. But if we're attacked, we'll respond. If India backs down, we will definitely wrap up this tension," he said.


Regarding the possibility of talks, the minister said he was not aware of any such potential engagements.


Indian Charge d'Affaires summoned

Pakistan on Wednesday summoned the Indian Chargé d'Affaires and lodged a strong protest against the Indian strikes.


“The Indian Chargé d'Affaires was summoned to the Ministry of Foreign Affairs today to receive Pakistan's strong protest over the unprovoked Indian strikes” at multiple locations across Pakistan and Pakistan-Occupied Kashmir, Foreign Office said in a statement.


It said that these strikes resulted in the deaths and injuries of several civilians, including women and children.


“It was conveyed that India's blatant act of aggression constitutes a clear violation of Pakistan's sovereignty. Such actions are in contravention of the UN Charter, international law, and established norms governing inter-state relations,” FO said.


Pakistan also firmly rejected what it called “India's baseless justifications for its hostile conduct.”


Pakistan closes airspace

Pakistan on Wednesday announced a 48-hour closure of its airspace for all air traffic after India carried out a military strike on terror targets in Pakistan and PoK.


Shortly after the military strike by India, Pakistani aviation authorities closed the airspace over Islamabad and Lahore and diverted flights to Karachi. Later, the entire airspace was closed for 48 hours as a precautionary measure.

However, aviation authorities reopened the airspace after an eight-hour closure.


International and domestic flights resumed this morning, with the majority of them departing from the Jinnah International Airport in Karachi or Lahore.


We will respond with full force. We will pay off this debt in the manner such debt is paid. All places are open for the international media to verify if they targeted terrorists' camps or civilians.

Khawaja Asif, Defence Minister, Pakistan

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