Which is better post budget ? STP or ULIP ?

POSTED BY newinvestor ON July 17, 2014 11:09 pm COMMENTS (3)


I’ve been trying to understand the implication of the budget rules (debt fund taxation) to determine whether STP or ULIP is the right way to invest. I currently have a lumpsum of 10-12L available for investment and am not sure which is the right approach to use to enter equity/balanced mutual funds.

Any guidance you can provide will be highly appreciated.


3 replies on this article “Which is better post budget ? STP or ULIP ?”

  1. newinvestor says:

    Hi Hemanth,

    I was referring to STP since I had a lump sum available now. However, not sure if it is still an effective way of entering mutual funds (balanced/large cap) with the exit load and the new tax rules.

    So would appreciate guidance in choosing between the 3 options:
    – Lumpsum investment in mutual funds (5L each in HDFC prudence and another large cap fund)
    – Invest in debt fund of same house and set an STP to transfer 50K monthly into the schemes mentioned above
    – Leave the funds in the bank A/C and invest 1L into each of the funds to create SIP over 5 months


    1. Hemanth Chandra says:

      Hi Neha,

      Before answering this, can you please answer my 3 queries.

      a. Do you have contingency fund in place
      b. Do you have life insurance.
      c. Do you have health insurance……

  2. Hemanth Chandra says:

    Don’t invest in any ULIPs…. never ever…..

    Do you mean SIP or STP ?

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