STP Calculator
Simulate Systematic Transfer Plans to systematically transfer capital from liquid debt funds to high-growth equity mutual funds.
Did this calculation save you time?
Student ProjectHi! I'm a student developer building Calculat in my spare time. I was tired of searching for basic math tools and having to click through 10 spammy popups, loan ads, and cookie trackers.
I keep this website 100% free, private, and ad-free. If this helped you with your homework, project, or finances today, bookmarking this page or telling a friend helps me keep building more free tools!
What Is a STP Calculator?
A Systematic Transfer Plan (STP) is an automated wealth management strategy that lets an investor park a lump sum in a low-risk source fund (such as a liquid or debt mutual fund) and systematically transfer a fixed dollar amount each month into a higher-growth target fund (such as an equity index or thematic fund). Both funds continue compounding simultaneously.
How to Use This Calculator
- Enter the initial lump sum deposited in your source fund.
- Enter the monthly amount to systematically transfer to the target fund.
- Specify expected annual returns for the source fund (e.g., 5%–7% for debt funds) and the target fund (e.g., 10%–14% for equity).
- Set the transfer duration in months.
- Analyze the remaining source balance, accumulated target fund value, and overall combined corpus.
STP Dual Compounding Simulation
S_{m+1} = (S_m \times (1 + r_s)) - T \quad ; \quad E_{m+1} = (E_m + T) \times (1 + r_e)At each month m, remaining source balance S earns monthly return r_s before transfer T is deducted. The transferred capital joins target balance E and earns equity return r_e.
Worked Example
Scenario: Lump sum of $100,000 parked in a liquid fund (6% return) transferring $2,500/month for 36 months into an equity fund (12% return).
Source fund begins at $100,000, earning ~0.50% per month while funding 36 monthly transfers.
Total transferred over 36 months: $90,000. Remaining source fund: ~$25,300 due to intermediate interest.
Target equity fund accumulates transfers plus 1% monthly compounding, reaching ~$108,000.
Total Combined Corpus: ~$133,300 against the original $100,000 deposit.
Tips & Key Notes
- STP is the ideal approach when you receive a sudden windfall (such as a property sale, bonus, or inheritance) and wish to invest in equities without risking a sudden market peak.
- Ensure both source and target funds belong to the same mutual fund family / fund house to enable automated STP transfers.
- Be mindful of short-term capital gains tax or exit loads when transferring out of debt funds within early holding windows.
Frequently Asked Questions
What is the primary benefit of an STP over a lump sum equity investment?
An STP eliminates the psychological stress and downside risk of investing a large lump sum right before a market drop. Your money earns steady liquid debt interest while rupee-cost averaging into the equity market.
Can STP transfers be initiated between different fund houses?
Generally no. Mutual fund regulations require both the source scheme and target scheme to be managed by the same Asset Management Company (AMC).
What happens when the source fund balance runs out?
Once the source fund capital is completely exhausted, the automated STP instructions conclude automatically without penalty. Your target fund continues compounding undisturbed.
Is an STP subject to capital gains tax?
Yes. Each monthly transfer out of the source fund is legally treated as a redemption of debt fund units, which may trigger short-term capital gains tax depending on holding duration and local jurisdiction.
Related Calculators
Explore similar toolsSIP Calculator
Calculate long-term wealth accumulation and compound returns from monthly Systematic Investment Plans in mutual funds and index funds.
Fixed Deposit Calculator
Calculate maturity value, compound interest earned, and effective annual yield (APY) on bank fixed deposits and CDs.
ROI Calculator
Calculate Return on Investment (ROI), Compound Annual Growth Rate (CAGR), and total wealth multiplier for any asset or project.