Systematic transfer plan or STP allows investors to periodically transfer a certain value of investment or number of units from one scheme to another scheme of the same mutual fund house.

Thus, at regular intervals a pre-determined value of investment or number of units is redeemed from one mutual fund scheme and is invested in another.

This allows investors to gradually shift investments from one scheme to another or one asset class to another.

SWP is the periodic withdrawal of a fixed amount of money from the invested corpus at pre-defined intervals. It’s a convenient way to draw down one’s holding over the period of time.

Through SWP investor can reinvest the redeemed cash in another portfolio or use it as a source of regular income.