STP Calculator
Simulate staggering a lumpsum deposit from a conservative liquid/debt fund into high-growth equity funds over time.
What is an STP (Systematic Transfer Plan) & Why Use It?
A Systematic Transfer Plan (STP) allows an investor to park a large sum of idle capital into a lower-risk source fund (such as a Liquid Fund, Ultra-Short Duration Fund, or Arbitrage Fund) and systematically transfer a fixed amount periodically into an equity mutual fund.
Eliminates Peak-Timing Panic
When benchmark indices (Nifty/Sensex) are at all-time highs, deploying ₹10 Lakhs all at once carries drawdown risk. STP averages your entry price across market ups and downs.
Better Yield than Savings Accounts
Rather than letting surplus cash sit in a bank account earning 2.5%–3%, liquid funds historically yield 6.5%–7.2% annualized returns while awaiting equity transfer.
Frequently Asked Questions
Clear answers to common questions on formulas, taxation, and investing strategy.
Q1. Can I set up an STP between two different mutual fund houses (AMCs)?
No. Under SEBI regulations, an STP can only be executed between schemes managed by the same Mutual Fund house (e.g. from HDFC Liquid Fund to HDFC Flexi Cap Fund).
Q2. How is STP taxed under Indian Income Tax Act?
Each transfer from the source fund is legally treated as a partial redemption from the debt/liquid fund. Gains generated by the source fund units transferred are subject to capital gains tax as per your income tax slab (for non-equity debt funds).
Q3. What is the ideal tenure for an STP?
Financial planners generally recommend 6 to 12 months for moderately sized windfalls, and 18 to 24 months for large capital deployments during elevated valuation periods.
Q4. Can I cancel an STP before completion?
Yes! You can modify or cancel an ongoing STP online at any time with zero lock-in or cancellation penalties.
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Turn Calculations into Real Financial Freedom
Calculators provide mathematical estimates, but consistent wealth creation requires choosing the right high-performing diversified schemes, tracking annual alpha, and disciplined rebalancing.