Systematic Transfer Plan (STP) in mutual funds

Mon, 18 May 2026 00:00:00 +0000

A Systematic Transfer Plan (STP) is a mechanism to move a fixed amount on a fixed schedule from one mutual fund scheme to another within the same AMC, typically from a liquid or short-duration debt scheme into an equity-oriented scheme. STP combines the immediate-deployment benefit of a lump-sum investment with the rupee-cost-averaging benefit of a SIP , making it the canonical mechanism for deploying a large existing cash reserve into equity exposure gradually.

For an investor who has just received a large lump sum (a bonus, an inheritance, a property sale proceed, a maturing fixed deposit), the choice between immediate full deployment into equity and gradual deployment over many months reflects a trade-off between timing risk and time-in-market. STP resolves this trade-off by parking the corpus in a low-risk liquid scheme while systematically transferring monthly tranches into the target equity scheme.

Systematic Transfer Plan (STP)

Sat, 16 May 2026 00:00:00 +0000

A Systematic Transfer Plan (STP) is a facility under which an investor periodically transfers a fixed amount, a fixed number of units, or the capital appreciation from one mutual fund scheme (the source scheme) to another scheme (the destination scheme) of the same AMC at regular intervals, without the transferred amount passing through the investor’s bank account. Each STP instalment is treated as a redemption from the source scheme and a simultaneous subscription to the destination scheme, executed at the respective applicable NAVs on the STP date.

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Systematic Transfer Plan (STP) in mutual funds

Systematic Transfer Plan (STP)