SIP – Systematic Investment Plan
A SIP allows you to invest a fixed amount every month into a mutual fund. It helps you build wealth gradually by benefiting from compounding and rupee-cost averaging. For example, investing ₹5,000 every month for 10 years at 12% annual return can grow to around ₹11 lakh, even though you invested only ₹6 lakh.
Lumpsum Investment
A Lumpsum investment means investing a large amount at once into a mutual fund or any growth-based asset. The amount grows over time through compounding. For example, investing ₹2 lakh for 10 years at 12% annual return can grow to around ₹6.2 lakh, giving a gain of more than ₹4 lakh.
SWP – Systematic Withdrawal Plan
SWP lets you withdraw a fixed amount every month from your existing investment while the remaining money continues to earn returns. It is useful for retirement income or regular cash flow needs. For example, if you have ₹10 lakh invested and withdraw ₹10,000 monthly, with a 12% return, your money may last for several years while still giving you steady income.
