Published Jun 22, 2026 4 Min Read

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Introduction

SIP, STP and SWP serve different purposes in a mutual fund journey. SIP helps you invest regularly, STP helps you move money between schemes gradually, and SWP helps you withdraw money at fixed intervals.

  • SIP (Systematic Investment Plan): Invest a fixed amount regularly into a mutual fund scheme. SIPs can start from Rs. 100 per month.
  • STP (Systematic Transfer Plan): Transfer money from one mutual fund scheme to another at regular intervals.
  • SWP (Systematic Withdrawal Plan): Withdraw a fixed amount from your mutual fund investment periodically.
  • Risk management: STP can reduce the risk of investing a large lump sum into equity funds at one time.
  • Investment lifecycle: Many investors use SIP during accumulation, STP during allocation changes, and SWP during retirement or income generation.
  • Platform access: The Bajaj Broking website provides access to 4,000+ mutual fund schemes across equity, debt, hybrid, ELSS, thematic funds, and NFOs.

You can begin your mutual fund journey on the Bajaj Broking website by completing KYC, exploring thousands of schemes, and starting a SIP from Rs. 100 per month.

What is SIP (Systematic Investment Plan)?

A SIP is a method of investing in a mutual fund scheme at regular intervals. It is not a mutual fund category. You invest a fixed amount monthly, quarterly, or at another chosen frequency.

When you invest through SIP, mutual fund units are allotted based on the applicable NAV (Net Asset Value) on the investment date. Since purchases happen regularly, SIPs help spread investments across different market levels.

Key points about SIP

FeatureDetails
PurposeRegular investing
Investment frequencyMonthly, quarterly, or other intervals
Minimum investmentRs. 100 per month on the Bajaj Broking website
Unit allocationBased on applicable NAV
Suitable forSalaried individuals and long-term investors

What is STP (Systematic Transfer Plan)?

An STP allows you to transfer money from one mutual fund scheme to another at fixed intervals. It is commonly used when you invest a lump sum in a debt fund and gradually move money into an equity fund.

Instead of investing the entire amount in equity at once, STP spreads the transfer over time. This may help reduce timing risk during volatile markets.

Key points about STP

FeatureDetails
PurposeGradual transfer between schemes
Source schemeUsually debt or liquid fund
Destination schemeOften an equity fund
FrequencyDaily, weekly, monthly, or as offered by the AMC
Suitable forInvestors holding a lump sum

What is SWP (Systematic Withdrawal Plan)?

An SWP allows you to withdraw a fixed amount from your mutual fund investment at regular intervals. It is often used by retirees or investors seeking periodic cash flow.

Units are redeemed from your mutual fund scheme to generate the withdrawal amount. The remaining units continue to stay invested and participate in market movements.

Key points about SWP

FeatureDetails
PurposeRegular withdrawals
Withdrawal frequencyMonthly, quarterly, or other intervals
Source of payoutRedemption of mutual fund units
Remaining investmentContinues to stay invested
Suitable forRetirees and income-seeking investors

SIP vs STP vs SWP: Key differences

FeatureSIPSTPSWP
Full formSystematic Investment PlanSystematic Transfer PlanSystematic Withdrawal Plan
Main objectiveRegular investingGradual transferRegular withdrawal
Money flowInto a schemeBetween schemesOut of a scheme
Typical userNew investorLump-sum investorRetiree or income seeker
Unit impactUnits purchasedUnits transferredUnits redeemed
Stage of useWealth creationPortfolio allocationIncome generation

Key features of SIP, STP and SWP

The difference between SIP STP SWP becomes clearer when you understand their core features.

FeatureSIPSTPSWP
Investment disciplineYesNoNo
Lump-sum managementNoYesNo
Income generationNoNoYes
Long-term wealth buildingYesCan supportLimited
Regular transactionsYesYesYes

All three facilities are offered through mutual fund schemes managed by their respective AMCs. Returns remain market-linked and are not guaranteed.

When should you use SIP, STP or SWP?

Different life stages often require different approaches.

Early career stage

If you receive regular income and want to build wealth gradually, SIP may be suitable. You can start investing from Rs. 100 per month and increase contributions as your income grows.

When you receive a lump sum

If you receive a bonus, inheritance, or sale proceeds, STP may help. You can first park money in a debt or liquid fund and transfer it gradually into equity funds.

Near retirement or after retirement

If you need regular cash flow from your investments, SWP may be useful. It can provide periodic withdrawals while the remaining investment continues to stay invested.

Understanding risk levels

Mutual fund schemes carry different risk levels. SEBI requires all schemes to display a riskometer showing risk categories:

  • Low
  • Low to Moderate
  • Moderate
  • Moderately High
  • High
  • Very High

Always check the SEBI riskometer before investing or transferring money between schemes.

Conclusion

SIP, STP and SWP are different tools designed for different purposes. SIP helps you invest regularly, STP helps you move money between schemes gradually, and SWP helps you create periodic withdrawals.

Many investors use all three at different stages of their financial journey. Before investing, complete your mandatory KYC and review the scheme details, riskometer, investment objective, and fund category. The Bajaj Broking website provides access to 4,000+ mutual fund schemes across equity, debt, hybrid, ELSS, thematic funds, and NFOs.

Frequently asked questions

Can SIP, STP and SWP be used together?

Yes. Many investors use SIP, STP and SWP together during different phases of investing. For example, you may build wealth through SIPs, use STP when deploying a lump sum, and later use SWP for retirement income. This combination is often referred to as a complete investment lifecycle approach. The SIP STP SWP mutual fund strategy can help align investments with changing goals.

Is STP better than investing a lump sum directly in equity?

STP is not automatically better than a direct lump-sum investment. It is mainly used to reduce market timing risk by transferring money gradually from one scheme to another. On the Bajaj Broking website, investors can choose from 4,000+ mutual fund schemes and decide the most suitable approach based on risk tolerance and goals.

Does SWP provide guaranteed income forever?

No. SWP does not provide guaranteed income forever. Withdrawals are funded through the redemption of mutual fund units, and returns remain market-linked. If withdrawals exceed portfolio growth for a long period, your investment value may decline. Mutual fund returns are never guaranteed.

What is the minimum amount for SIP, STP and SWP?

The Bajaj Broking website allows SIP investments starting from Rs. 100 per month for eligible schemes. Minimum STP and SWP amounts vary by mutual fund scheme and AMC. You should check the scheme information document and transaction rules before starting an STP or SWP.

How do SIP, STP and SWP work together in a complete investment lifecycle?

You can use SIP during the accumulation phase, STP when reallocating a lump-sum investment, and SWP during retirement or income generation. This creates a structured approach to investing and withdrawals. Before starting any of these facilities, complete your KYC, which is mandatory under SEBI regulations. The Bajaj Broking website offers tools such as Dashboard, Portfolio, Orders, and MF Profile to track your investments.

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The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

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