Selling units back for money. Redemption means selling your units back to the scheme for cash.

Withdraw a fixed amount regularly. A Systematic Withdrawal Plan pays out a fixed amount on a schedule.

Mutual fund transactions: SIP, STP, SWP and switch

Q: A switch moves money:

From one scheme to another in the same fund house. A switch is an internal move between schemes of the same AMC.

Q: An STP moves money:

Gradually from one scheme to another. A Systematic Transfer Plan shifts money in steps between schemes, often debt to equity.

Everyday transactions

Purchase, redeem, switch, SIP, STP, SWP

Beyond buying and selling, three systematic tools do the work automatically. Knowing when each fits is a big part of good, ongoing service.

This lesson teaches a concept for the NISM Series V-A exam. It is education, not financial advice.

1
A purchase buys units; a redemption sells them back for money.
2
A switch moves money from one scheme to another within the same fund house.
3
An SIP invests a fixed amount regularly; an SWP withdraws a fixed amount regularly.
4
An STP moves money gradually from one scheme to another, often from a debt fund into equity.

Rupee example

A retiree can set an SWP to receive ₹20,000 every month, with the fund selling just enough units each time.

Practice

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Real exam format. Answer by voice, tap, or press 1 to 4. No negative marking, so always attempt.

Answer by voice

Tap the mic and say A, B, C or D. Typing is optional.

A redemption is:

Redemption means selling your units back to the scheme for cash.

Buying and switching are different actions.

A switch moves money:

A switch is an internal move between schemes of the same AMC.

It is not a withdrawal to the bank.

An SWP is used to:

A Systematic Withdrawal Plan pays out a fixed amount on a schedule.

Regular investing is an SIP; the rest are unrelated.

An STP moves money:

A Systematic Transfer Plan shifts money in steps between schemes, often debt to equity.

It is an internal, gradual transfer.

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NISM V-A syllabus

1What a mutual fund really is

2How a fund is built

3Who watches over it

4The offer document, decoded

5Getting funds to investors

6Selling the right way

8NAV, loads and the daily price

9Types of schemes, and picking one

10Return, risk and performance

11How gains are taxed

12Serving the investor

See the full roadmap →