A Systematic Transfer Plan (STP) calculator models what happens when you park a lumpsum in a debt or liquid fund and move a fixed amount into an equity fund every month.
About this calculator
A Systematic Transfer Plan (STP) calculator models what happens when you park a lumpsum in a debt or liquid fund and move a fixed amount into an equity fund every month. The source fund keeps earning a steady debt-style return on whatever is left, while the destination fund grows from both the new transfers and equity-style compounding.
The approach helps you avoid timing risk on a large lumpsum without parking the money in a savings account. Instead of investing everything into equity on day one, you spread the entry across months while the idle balance still earns more than a bank account.
Common uses
- Decide how to deploy a bonus, severance, or maturity proceeds into equity over 12 to 36 months
- Compare slow vs fast transfer pacing and see how it changes the final wealth
- Check how long a ₹10 lakh debt corpus lasts at ₹25,000 per month transfers
- Show clients or family members why staggering an equity entry can be calmer than a one-shot lumpsum
Frequently asked questions
How is STP different from SIP?
An SIP draws from your bank account every month, so the cash flow is fresh income. An STP draws from an existing lumpsum sitting in a debt or liquid fund, so the money is already invested before the first transfer happens. The destination side behaves the same in both cases.
Is the source fund safe during an STP?
An STP is usually run from a liquid or short-duration debt fund, which is much steadier than equity but is not risk-free. Returns can move with interest rate changes, and there is no capital guarantee. The calculator assumes a constant source return, which is a reasonable approximation for short-tenure debt funds.
How long should an STP run?
Most investors stretch the transfer over 6 to 24 months. Shorter than that and you do not really reduce timing risk on a large lumpsum. Longer than that and you leave too much money in low-return debt while equity could be working for you. The right answer depends on the size of the corpus and how nervous a single market drawdown would make you.
Are STP transfers taxed?
Each transfer out of the source fund is treated as a redemption. If the source is a debt fund, gains are taxed at your slab rate from FY 2023-24 onwards regardless of holding period. If the destination is an equity fund, that side follows equity capital gains rules when you eventually redeem.