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Know Everything About Sip And Swp
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What is Systematic investment plan (SIP)?
Systematic Investment Plan, mainly known as SIP investment lets you invest a fixed amount in the scheme of your choice, for regular intervals. It helps to generate good corpus if invested for a longer period of time. It helps in increasing the returns by preventing to put all the money when the market is at peak. SIP makes the investment as a habit. In SIP, an amount which you have mentioned in the application gets deducted from your savings account at a fixed date which you have selected. It is later put into the mutual fund scheme which you have opted for.
One can select the SIP frequency from monthly to weekly and even daily. Also, you can choose the amount of SIP and also put in additional amount if you find the returns are good and you have enough amount to invest. In debt, scheme SIP is less preferable as such schemes are less volatile and risky.
SWP plan basically lets you withdraw a certain amount of money at a regular interval from your lump sum investment. The amount and time can be decided in advance. SWP is beneficial for those who are retired and in need of a fixed source of income during their retirement period. Also, those who have some specific requirement such as fixed amount of cash for child's studies can also take advantage of this option.
How to withdraw money from mutual funds?
Directly through AMC
There are AMC portals through which you can withdraw money from mutual funds. Using your id and password one can redeem a whole or partial amount as per the need. Also, one can go to the AMC office and submit the redemption form to withdraw the amount. NEFT or cheque is sent once the redemption process is successful. Funds are generally credited after 3 working days.
In case scheme has been purchased through some agent, one needs to fill the details in mutual fund redemption form and submit it via an agent. After the redemption process, the amount gets credited in the account of the investor via NEFT or a cheque.
There are AMC partner portals which let you redeem the amount through loin id and password. With just a few clicks one can withdraw the money. Once the request is confirmed and processed the amount is directly sent to the linked account with the folio of the investor.
Trading or Demat account
In case investment is done via Demat or trading account then redemption process remains same. Using an e-payout one can send the redemption request. The amount is then sent to the bank account that is registered with the Demat account.
However, while withdrawing money, an investor should check two things. Certain schemes have an exit load wherein before a year if you withdraw the money, for instance, then a certain percentage of exit, a load is charged on the asset value. Secondly, in schemes, you need to check the minimum amount which can be withdrawn. Thus, read all the documents carefully before the withdrawal of the money.
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