What is variable STP?
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What is variable STP?
Variable Transfer Plan (VTP) is a variation of Systematic Transfer Plan (STP). VTP is a facility where a unitholder can opt to transfer variable amounts from source scheme to the target scheme, based on the value of his investments in the target scheme, as on the date of transfer at pre-determined intervals.
What is difference between STP and SWP in mutual fund?
An STP is a regular and fixed amount that is transferred from one mutual fund to another scheme. Finally, SWP is a regular and fixed form of withdrawals from schemes for a pre-set period of time.
What is switch STP SWP in mutual fund?
In a nutshell, SIP means a systematic method of investing in Mutual Funds while STP means systematically transferring the money from one Mutual Fund scheme to another. Finally, SWP means withdrawal of funds or redemption of Mutual Fund units in a systematic manner.
Which mutual fund is good for SWP?
Top SWP Funds
| Scheme Name | AMC Name | Lumpsum Amount |
|---|---|---|
| HDFC Hybrid Equity Gr | HDFCMF | 100,000 |
| Withdrawal Period 01-01-2013 to 16-12-2021 No of Mly. Installments 62 Total Withdrawal Amount 186,000 Current Value 2,457 Return XIRR \% 20.56 Cash Flow | ||
| Nippon India Equity Hybrid Gr | NipponIndiaMF | 100,000 |
Is STP better than SIP?
As discussed above, STP indeed works like a SIP mechanism where a fixed amount gets invested in a particular fund. However, if you have a lumpsum amount to invest then it is better to invest it through STP.
How is STP taxed?
Taxation on STPs The redemption is usually taxable. The money transferred within the first three years from a debt fund is subject to short-term capital gains tax (STCG). But even with this tax aspect, the returns earned would be higher than those in a bank account.
Does STP attract tax?
An STP from equity funds to ELSS funds.. If you equity fund has been held for more than 1 year then it is long term capital gains and is entirely tax free. However, you need to be cautious about doing STP on equity funds when held for less than 1 year. The redemption attracts 15\% STCG tax and that adds to your cost.
How do mutual funds use STP?
If you are investing Rs. 12 Lakhs in an equity fund through an STP, first you will have to select a debt fund which allows STP to invest in that particular equity fund. Once you select, invest the whole amount i.e. is Rs. 12 Lakhs in the debt fund.
How does SWP work?
A Systematic Withdrawal Plan or SWP allows an investor to withdraw from his/her mutual fund scheme every month on predefined dates. This withdrawal could be a fixed or a variable amount. It could be made on an annual, semi-annual, quarterly, or even monthly basis.
Is STP is a combination of SIP and SWP?
Systematic investment plan (SIP), systematic transfer plan (STP) and systematic withdrawal plan (SWP) are methods of systematic investing and withdrawal, each serving a different purpose.
Is STP a good option?
STP is an excellent choice for those looking to invest a lump sum but is not ready to do that at one go. This could be because they are risk-averse and do not want to get tangled in the market volatility. They may also be wary of equities as a rule. Such investors can opt to invest in liquid or debt funds.