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STP

Investment

Systematic Transfer Plan

A facility that automatically transfers a fixed amount from one mutual fund (typically a liquid or debt fund) into another fund (typically equity) at regular intervals, spreading a lumpsum investment over time.

Written by · Reviewed by the thecalcu.com team · Last updated June 29, 2026

What is STP?

A Systematic Transfer Plan (STP) automatically moves a fixed amount of money from one mutual fund, typically a liquid or debt fund, into another fund, typically an equity fund, at regular intervals (usually monthly). STP is most commonly used to deploy a lumpsum amount gradually into equity markets, combining the safety of a debt/liquid fund's stable returns with the gradual market-timing risk reduction normally associated with SIPs.

Worked Example

An investor receives a ₹12 lakh bonus and sets up a 12-month STP: the full ₹12 lakh is first invested in a liquid fund, and ₹1 lakh is automatically transferred into an equity fund each month for 12 months. By the end of the year, the entire ₹12 lakh has been deployed into equity, spread across twelve different entry points rather than one, while the undeployed portion earned the liquid fund's return throughout the transfer period.

Compare a direct lumpsum entry against a staggered approach using the Lumpsum Calculator and SIP Calculator to estimate outcomes under different market scenarios.

Related Calculators

SIP Calculator →Calculate your SIP returns instantly. Enter monthly investment, expected return, and duration to see your estimated corpus and gains in seconds.
Lumpsum Calculator →Calculate returns on a one-time lump sum investment instantly. Enter your investment amount, expected return, and duration to see total corpus and gains.

Related Terms

SIPSystematic Investment PlanRupee-Cost AveragingRupee-Cost AveragingNAVNet Asset Value

Frequently Asked Questions

How is STP different from a regular SIP?

A [SIP](/glossary/sip/) invests fresh money from your bank account at regular intervals, while an STP transfers money that's already invested in one mutual fund (usually a liquid or debt fund) into another fund (usually equity) at regular intervals. STP is typically used to deploy an existing lumpsum gradually, whereas SIP is used to invest ongoing income gradually.

Why would I use STP instead of investing my lumpsum directly?

Investing a large lumpsum directly into equity exposes the entire amount to the market's price on a single day, while STP spreads that exposure across several months, similar to [rupee-cost averaging](/glossary/rupee-cost-averaging/) for SIPs. This reduces the risk of a market downturn right after a large one-time equity entry, at the cost of slightly lower returns if the market happens to rise steadily during the transfer period.

Does my money earn any return while it waits to be transferred via STP?

Yes, the portion of your lumpsum still sitting in the source fund (typically a liquid fund) continues to earn that fund's return, usually 6-7% annually, while it waits to be transferred. This is an advantage over simply leaving the money in a regular savings account, which usually earns 3-4%.

How long should an STP run?

Most investors run an STP over 6 to 12 months, transferring an equal portion of the lumpsum each month, though the exact duration depends on how much timing risk you want to spread out versus how quickly you want full equity exposure. A longer STP period reduces timing risk further but delays full participation in equity market gains if the market rises during that period.