STP Calculator (Systematic Transfer Plan)
Model a Systematic Transfer Plan moving money from a debt fund to equity each month — final equity value, source fund remaining and total transferred.
How it works
Each month both funds grow by their monthly return, then t = min(transfer, source) moves from source to target: source = source − t, target = target + t.
A Systematic Transfer Plan (STP) parks a lumpsum in a low-risk fund (usually debt or liquid) and shifts a fixed amount into an equity fund every month. It earns modest returns on the money still waiting while averaging your entry into equity, so you avoid deploying a large sum at a single market level. STPs are a common way to move a windfall or maturing deposit into equities gradually.
Worked example
Moving ₹50,000 a month from a ₹6,00,000 debt fund earning 6% into an equity fund returning 12% over 12 months leaves about ₹20,000 still earning in the source and builds an equity corpus of about ₹6.34 lakh, having transferred the full ₹6,00,000.
Frequently asked questions
How does an STP differ from a SIP?
A SIP invests fresh money from your bank each month. An STP moves money you have already invested from one fund to another — typically from a debt or liquid fund into equity — so the un-transferred balance keeps earning in the meantime.
Does each transfer trigger tax?
Yes. Each transfer is a redemption from the source fund, so any gain on the units sold is taxable. Liquid and debt funds are usually chosen as the source partly because their short-term gains are modest.
Why not just invest the lumpsum in equity directly?
You can, and in a rising market that often ends higher. An STP trades some of that upside for lower timing risk, spreading your entry so a sharp fall right after investing hurts less.
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Educational estimate only, not investment advice. Mutual-fund and market-linked returns are not guaranteed and past performance does not predict the future. Verify current fund details and consult a SEBI-registered adviser.