Investor Education

Mutual fund terms, explained simply

Plain-language explanations of the words you will see on forms, statements and scheme documents - each linked to the AMFI and SEBI pages it is based on.

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Last Updated: October 2026

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SIPSystematic Investment Plan (SIP)A SIP lets you invest a fixed amount in a mutual fund scheme at regular intervals - usually monthly - instead of investing a large amount at once.
SIP Top-UpSIP Top-Up (Step-Up SIP)A SIP top-up automatically increases your SIP instalment at a fixed interval - typically once a year - by a fixed amount or a percentage.
SWPSystematic Withdrawal Plan (SWP)An SWP lets you withdraw a fixed amount from a mutual fund scheme at regular intervals, while the remaining units stay invested.
STPSystematic Transfer Plan (STP)An STP transfers a fixed amount at regular intervals from one scheme (the source) to another scheme (the target) of the same fund house.
Lump SumLump Sum InvestmentA lump sum investment is a single, one-time purchase of mutual fund units, as opposed to regular SIP instalments.
PurchasePurchase (Fresh & Additional)A purchase is an investment into a mutual fund scheme. The first investment in a scheme creates a folio (fresh purchase); later investments in the same folio are additional purchases.
RedemptionRedemption (Withdrawing Your Money)Redemption means selling your mutual fund units back to the fund house. The proceeds are credited to your registered bank account.
NAVNet Asset Value (NAV)NAV is the per-unit value of a mutual fund scheme - the market value of its assets, minus liabilities and expenses, divided by the number of units outstanding.
Folio NumberFolio NumberA folio number is the account number assigned to you by a fund house. It identifies your holdings with that AMC, much like a bank account number.
KYCKnow Your Customer (KYC)KYC (Know Your Customer) is the one-time identity and address verification that every investor must complete before investing in mutual funds.
Transaction TATsTurnaround Times (TAT) for Mutual Fund TransactionsSEBI and AMFI set maximum timelines (turnaround times) that fund houses must follow for common investor transactions. Here are the key ones.

These pages are for investor awareness only and are written in our own words based on material published by AMFI and SEBI; the source links on each page take you to the original. They are not investment advice. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.