STP or SIP  

Are you saving something from your regular income?

If you are saving, is it getting added to your investment corpus?

If you are creating a corpus, are you getting above inflation return on it?

Systematic approach towards investments is the best way to save, accumulate and create wealth for your future. Two such strategies are Systematic Investment Plan (SIP) and Systematic Transfer Plan (SIP). In SIP, a fixed amount is invested in a particular scheme at periodic intervals. SIP is a very good strategy for salaried people, or those who receive a periodic inflow of cash.

Advantages of SIP:

Saving and wealth accumulation

Inculcates disciplined habit of investing

Entry at various market levels (averages out the possible risk associated with the equity market)

Hassle-free mechanism (one-time arrangement – instructions are given at the time of initial transaction)

Power of Compounding

Investments synchronised with your cash inflows/salary

If you have a lumpsum amount, but do not want to expose the entire amount to equity at one go, you can make an arrangement where some amount gets transferred to an equity scheme from a debt scheme periodically. This system is known as Systematic Transfer Plan.