STP Calculator
About STP (Systematic Transfer Plan)
Lump Sum
Deployed Gradually into Equity
12–36 Mo
Typical STP Duration
Nil
STP Charge (within same AMC)
STCG/LTCG
Tax on Each Transfer (Source Fund)
A Systematic Transfer Plan (STP) moves a fixed amount from a liquid or debt fund (source) to an equity fund (target) at regular intervals. It is ideal for investors with a lump sum who want to reduce the risk of deploying all at once into equities. The source fund earns liquid fund returns while the money waits, and equity exposure grows gradually — combining the benefits of lump sum investment and rupee cost averaging.
Frequently Asked Questions
What is STP and how does it differ from SIP?
A Systematic Transfer Plan (STP) moves a fixed amount from one mutual fund (typically a liquid or debt fund) to another (typically an equity fund) at regular intervals. Unlike SIP — where money comes from your bank — STP deploys an already-invested lump sum gradually into equity, reducing the risk of investing at market peaks.
How does this STP calculator work?
Enter the lump sum amount, the expected growth rate of the target fund, the tenure, and the annual transfer rate (% of principal transferred per year). The calculator shows the estimated final value of the transferred corpus and a year-by-year breakdown of how much has moved from the source to the target fund.
What transfer rate should I choose for STP?
A common approach is to transfer 10–20% of the lump sum per year (monthly STP instalment = lump sum ÷ number of months). For a 12-month STP, that is 1/12th of the corpus per month. Longer STP tenures (24–36 months) reduce timing risk further but delay full equity exposure.
Is STP better than investing a lump sum directly into equity?
STP reduces timing risk by averaging the purchase cost over time, similar to SIP. If markets fall after you deploy the lump sum directly, STP would have outperformed. If markets rise steadily, lump sum deployment would have been better. For large amounts and uncertain market conditions, STP is generally the recommended approach.
Are there any charges for STP in mutual funds?
Most fund houses allow STP within the same AMC at no additional cost. However, each transfer from the source fund may trigger an exit load (if within the exit load period, typically 1 year for equity funds, 7–30 days for liquid funds) and capital gains tax on the redeemed units. Always check the fund's exit load schedule before setting up an STP.
How is STP taxed in India?
Each STP instalment is treated as a redemption from the source fund and a fresh purchase in the target fund. Gains from the source fund are taxed: equity funds held under 1 year at 20% (STCG) and over 1 year at 12.5% above ₹1.25 lakh (LTCG). Liquid/debt fund gains are taxed at your income slab rate. Tax-loss harvesting within STP is not applicable.
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Disclaimer: Returns are not guaranteed or assured. The calculator's accuracy is not warranted. Before making any investment decisions, please seek advice from your financial advisors.
