Understand SIP and STP to earn money from money

Photo: CANVA If you want money from money, then know about SIP and STP

SIP and STP: If you are at all interested in investment schemes or mutual funds, then you must have heard about SIP and STP. Often people start planning to invest their money without knowing about it. Experts say that you can take full advantage of STP and STP only when you have detailed information about it. Let us explain to you in very simple language today what are STP and STP.

What is SIP?

When a customer deposits a fixed amount in a mutual fund at a fixed interval, it is called SIP i.e. Systematic Investment. Investment in this starts from Rs.500. Now you must be thinking that what is the benefit of investing in SIP. Actually in SIP the customer is protected from the ups and downs of the market. That is, if you do not have much knowledge of the stock market and you are not aware of the government schemes and bank’s strategy, then you can feel free to invest in SIP.

SIP is just a way to achieve your financial goals in a stipulated time. For example, if you want to buy a vehicle. want to buy a house. If you want to send children abroad to study or want to marry children, then SIP can be a great investment option for you. In this, the longer you continue to invest your money in the market. You get more benefits.

What is STP?

Like SIP, STP is also a method of investment. STP stands for Systematic Transfer Plan. But the method of investing money in it is slightly different from SIP. For example, if a customer has accumulated a lot of money and does not want to invest this money in the market at once, then he can opt for STP. Often people have the fear that by investing all the money in the market, they may have to face losses in the future.

Customers investing through STP can invest their money safely. In this, the entire money of the customer is deposited in a lump sum in a liquid fund or debt fund of a fund house. After this, the same money is transferred through STP at fixed intervals to the equity fund of the respective fund house. The minimum amount of STP depends on the fund scheme. In this, you can also divide your money in many parts.

There are two major advantages of investing in this way. Firstly, investing in equity funds gives good returns to the customer. And secondly, lump sum money kept in debt funds is always safe. It is not affected by market risk or other risks. The option of STP is often chosen by customers when they have accumulated a significant amount and their goal is very close.

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