There are several ways by which you can invest Into Mutual Funds:
- Lumpsum: A lumpsum Investment in mutual funds involves making a onetime substantial amount of Investment giving you an immediate exposure to its portfolio. We are of the opinion that lumpsum investment ought to be made when markets are substantially down as it provides more margin of safety to the Investment.
- SIP or Systematic Investment Plan means that you choose a fixed amount to be invested on regular intervals into the mutual funds. It is a more convenient form of Investment. This option evens out the ups and downs of the market. While lump sum implies that you invest all your money at one go, a SIP, on the other hand is suitable for people who get regular fixed income at fixed intervals like Daily, Weekly, Monthly, quarterly etc. as per their convenience. This is a disciplined way to invest and helps in building substantial wealth over a period. As regular Investments along with wealth accretion accumulates into a large corpus over a period.
- STP or Systematic Transfer Plan is where 2 Schemes from the Same AMC are selected, and the decided amount gets transferred from the 1st Scheme to the 2nd Scheme at Regular Intervals. This can be done Daily, Weekly, Monthly and Quarterly. The purpose of STP is to manage risks and optimise returns by transferring funds from debt funds to equity funds. This is another way to invest lumpsum over a short period of time to overcome the volatility in the market.
WAYS TO WITHDRAW MUTUAL FUNDS
- SWP or Systematic Withdrawal Plan: Is a powerful tool for generating regular income on fixed intervals. Especially for retirement purposes and for those who rely on their savings for their expenses. Mutual Funds also allow you to Withdraw Money Periodically which can be done by the way of Systematic Withdrawal Plan(SWP), where a decided amount gets credited in the Investor’s Bank Account at Selected Regular Intervals while the remaining Investment Continues to Grow. This can be done Weekly, Monthly, Quarterly, Half-Yearly, and Annually. You may customize cash flows to withdraw, either a fixed amount or the capital gains on the investment.
- Lump sum: Your investment either by way of lump sum or Systematic Investment Plan (SIP) grows substantially over a period of time. In case of need you can withdraw the amount in whole in one go or partially as per your needs.
To withdraw the money is a very easy process, the amount gets credited into your account linked to the investment within 3-4 working days after your instructions to withdraw the funds. For example: An Investor could could Invest Rs 500,000/- and request Rs 5000/- be paid on the 1st of every month Then, units worth Rs. 5000/- would be redeemed on the 1st of every month.