Published: 06th Aug 2024
By: Value Research
Though SIPs are typically seen as the default investment style for long-term investing, they are ideal for those with a steady stream of income.
Enter STPs or systematic transfer plans. They help you move your money from one mutual fund to another.
Say you earn Rs 5 lakh in a given month. Rather than letting it stay idle in a bank savings account, you decide to invest it in a debt fund and instruct it to transfer Rs 50,000 every month in an equity fund for the next 10 months. This is how an STP works.
SIPs require you to invest regularly, which is difficult for freelancers and self-employed, as they typically lack a consistent income stream. But STPs allow you to automatically invest lumpsums in a fund whenever they receive an income.
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