STP Calculator
Systematic transfer from a debt fund into equity, month by month.
Year-by-year source and target values
| Year | Source fund | Target fund | Total value |
|---|---|---|---|
| 1 | ₹6,57,235 | ₹6,34,125 | ₹12,91,360 |
| 2 | ₹80,994 | ₹13,48,673 | ₹14,29,667 |
| 3 | ₹0 | ₹16,10,360 | ₹16,10,360 |
A Systematic Transfer Plan (STP) parks a lump sum in a low-risk source fund — usually liquid or debt — and moves a fixed amount into a target equity fund every month. This calculator simulates both legs month by month, so you can see the source draining, the target compounding, and what the combined portfolio is worth at the end.
An STP is how investors avoid dumping a windfall, bonus or maturity proceeds into equity on a single day. Your money keeps earning debt-fund returns while it waits, and the monthly transfers average out your equity purchase price — the same rupee-cost averaging a SIP gives you, but funded from capital you already hold rather than from salary.
How an STP is calculated
The simulation runs one month at a time. The source fund first earns its monthly return (annual ÷ 12), then transfers min(monthly transfer, balance) out. The target fund earns its own monthly return and then receives that transfer. Transfers stop the moment the source is empty, after which whatever has already been moved keeps compounding at the target rate.
Take ₹12,00,000 in a 6% liquid fund transferring ₹50,000 a month into a 12% equity fund over 3 years. Because the source keeps earning while it drains, it funds 26 transfers rather than the 24 the raw arithmetic suggests, moving ₹12,81,556 in total. At the end of year 3 the source is empty and the target is worth ₹16,10,360 — the entire portfolio, versus ₹14,36,017 if the same ₹12,00,000 had simply stayed in the liquid fund.
How to use this calculator
- Enter the lump sum sitting in your source fund — the bonus, maturity amount or sale proceeds you want to deploy.
- Set the monthly transfer. Dividing the corpus over 12–24 months is the usual choice for entering equity.
- Set the source fund return; liquid and ultra-short debt funds have historically delivered around 5–7%.
- Set the target fund return you expect — 10–13% is a common long-term assumption for diversified equity.
- Pick a horizon longer than the transfer period, so you can see the target keep compounding after the source runs dry.
STP rules and taxation in India
Every STP instalment is legally a redemption from the source fund and a fresh purchase in the target, so each transfer is a taxable event. Debt fund gains on units bought on or after 1 April 2023 are added to your income and taxed at your slab rate regardless of holding period, which is the main cost of running an STP out of a debt fund. Exit loads on liquid and ultra-short funds are usually nil after seven days, so the transfers themselves rarely attract a charge — but always check the scheme document before fixing the frequency.
Fund houses only allow transfers between schemes of the same AMC, so choose your source fund knowing which equity fund you eventually want. Most require a minimum of six transfers and a minimum amount per transfer, typically ₹500 to ₹1,000. On the target side, equity units are sold first-in-first-out, so units bought through early transfers become long-term after twelve months while later ones do not — worth remembering if you plan to redeem the corpus in one go.
Frequently asked questions
What is a Systematic Transfer Plan?
An STP is a standing instruction that moves a fixed amount from one mutual fund scheme into another within the same fund house every month. Investors typically use it to shift a lump sum from a liquid or debt fund into an equity fund gradually rather than all at once.
Is an STP better than investing a lump sum directly?
It is safer, not necessarily more profitable. In a rising market a lump sum wins because the money is fully invested from day one; in a falling or volatile market the STP buys more units at lower prices. Most advisers suggest an STP when markets look expensive or when the amount is large relative to your portfolio.
How is an STP different from a SIP?
A SIP invests fresh money from your bank account each month, while an STP moves money you have already invested from one fund to another. The averaging effect on the equity side is identical; the difference is that STP money earns debt-fund returns while it waits instead of sitting in a savings account.
Is an STP taxable?
Yes. Each transfer counts as a redemption from the source fund, so any gain is taxable. For debt funds bought on or after 1 April 2023, that gain is added to your income and taxed at your slab rate, with no indexation benefit and no holding-period distinction.
How long should an STP run?
Twelve to twenty-four months is the common range. Shorter than six months barely averages anything, while stretching beyond two years leaves too much of your capital earning debt returns during a period when you intended to be invested in equity.
Can I transfer between funds of different AMCs?
No. An STP works only between schemes of the same asset management company, because it is a single instruction executed internally. To move between fund houses you would have to redeem manually and reinvest, which means waiting for settlement each time.
Related tools
SIP Calculator
Future value of monthly mutual-fund SIPs, with annual step-up.
Lumpsum Calculator
One-time investment growth and maturity value over the years.
SWP Calculator
Monthly withdrawals from a corpus and how long it lasts.
FD Calculator
Fixed deposit maturity value and interest with bank-style compounding.
RD Calculator
Recurring deposit maturity value and interest with quarterly compounding.
PPF Calculator
Public Provident Fund maturity value, interest and year-wise growth.
Salary Slip Generator
Create a professional payslip and download a white-label PDF — free.
Disclaimer: results are estimates based on the inputs and published rules/rates, for information only — not investment, tax or legal advice. Verify important decisions with a qualified professional. See our full disclaimer.