STP Calculator

A Systematic Transfer Plan automatically moves a fixed amount at a set interval — usually monthly — from one mutual fund scheme to another within the same fund house, typically from a liquid or debt fund into an equity fund. It lets a lumpsum earn debt returns while it waits instead of sitting in a savings account, and staggers the equity entry the way a SIP would.

Not on average — historically, markets rise more often than they fall, so the full amount invested on day one usually ends ahead. An STP wins when the market falls during the transfer period, because later installments buy units cheaper. The choice is about risk, not expected return: an STP trades some upside for protection against entering just before a decline, while the waiting money still earns debt returns.

Each STP installment is a redemption from the source fund, so it is a taxable event even though the money never reaches your bank account. If the source is a debt or liquid fund, since April 2023 the gain in each transfer is added to your income and taxed at slab rate. The gains per installment are usually small — a month or two of liquid-fund growth on one transfer amount — but they accumulate across the plan and belong in your tax return.

Common practice spreads a lumpsum over 6 to 18 months — long enough to average across a meaningful stretch of market prices, short enough that most of the money is not left earning debt returns for years. A very short STP barely differs from a lumpsum; a very long one drags the average entry out and, in a rising market, costs progressively more versus having invested at once. The right length is a judgment about how much timing risk you want to dilute.

Yes — an STP is an instruction within one AMC, transferring between two of its own schemes, so both the source and destination must belong to the same fund house. To move money between funds of different AMCs, you redeem from one and purchase the other yourself, which has the same tax consequences but no automation.