STP Calculator in Ahmedabad
A Systematic Transfer Plan (STP) parks a lump sum in a low-risk source fund (usually debt/liquid) and transfers a fixed amount into a target equity fund every month — averaging your entry instead of investing it all at one market level. Enter the lump sum, the monthly transfer and expected returns to see how both pots evolve.
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How it's calculated
The formula
Source: each month balance = balance × (1 + iₛ) − transfer. Target: each transfer compounds at the target monthly rate iₜ to the end of the period. Total value = source balance + target value.
Assumptions
- Constant source and target returns for the period (real returns fluctuate).
- Transfers at month-end; no exit load or capital-gains tax modelled.
- A fixed monthly transfer amount.
Sources
Real-world scenarios
See exactly how the numbers play out in the situations people actually face — so there are no surprises before you commit.
Staggering a ₹20 lakh lump sum into equity
Instead of dumping ₹20 lakh into equity at once, an STP parks it in a debt fund earning ~6.5% and moves ₹50,000 a month into equity over three years. Your idle cash keeps earning while it waits, and you buy equity across many price points instead of one.
It tames market-timing risk
Investing a large sum in one go means your whole corpus rides on a single day’s price. An STP spreads entry over months, averaging your cost and softening the blow if markets dip soon after — the discipline of a SIP applied to money you already have.
STP vs lump sum vs SIP
A lump sum suits a rising market; a SIP suits investing from monthly income; an STP is the bridge — ideal when you hold a windfall and want equity exposure without the all-at-once risk. Match the route to where your money is starting from.
Illustrative figures on standard reducing-balance / compounding assumptions — your actual numbers may vary.
Frequently asked questions
The details worth knowing before you rely on these numbers.
What is an STP?
A Systematic Transfer Plan moves a fixed amount from one mutual fund (usually a low-risk debt or liquid fund) into another (usually equity) at regular intervals. It lets you deploy a lump sum into equities gradually while the rest keeps earning a debt return.
How is STP calculated?
The source fund grows at its return but shrinks by each monthly transfer (like an SWP), while the target fund receives those transfers and compounds at its return (like a SIP). The calculator tracks both pots year by year.
Why use an STP instead of a lump-sum investment?
An STP averages your entry price across several months, reducing the risk of investing everything at a market peak — while the un-transferred money still earns a debt return rather than sitting idle.
Is STP better than SIP?
They solve different problems. A SIP invests fresh monthly savings; an STP deploys an existing lump sum gradually. If you already have a large amount to invest, an STP is usually the better tool.
Are STP transfers taxable?
Yes — each transfer is a redemption from the source fund and may trigger capital-gains tax on that fund’s gains. Debt-fund gains are taxed at your slab; plan transfers with this in mind.
How long should an STP run?
Most investors spread a lump sum over roughly 6 to 18 months. Too short a period barely averages your entry price; too long leaves money sitting in the debt fund earning less than equities might. There is no perfect number — match it to how wary you are of deploying the whole amount at once.
Which funds do I use as the source and target in an STP?
The source is usually a liquid or ultra-short debt fund — safe and easy to draw from — and the target an equity fund that matches your goal and risk. STP transfers generally happen within the same fund house, so you park the lump sum in that AMC’s debt fund and set up a transfer into its equity scheme.
Does an STP always beat investing the lump sum at once?
No. In a market that rises steadily, a one-time lump sum can end up ahead because more money was invested earlier. An STP’s advantage shows in flat or falling markets, where it buys more units at lower prices and spares you the regret of investing everything at a peak. Since no one can reliably time this, an STP is a sensible way to manage that risk.
Is this STP calculator free?
Yes — it is free, needs no sign-up, and runs entirely in your browser. Your inputs stay on your device unless you choose to speak with an Apex TechFin advisor.
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