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STP Calculator

Model moving money gradually from a debt fund into an equity fund with a systematic transfer plan (STP).

About the STP Calculator

Enter the lump sum in the source (debt) fund, the monthly transfer, the expected return of each fund and how many years to show. The calculator tracks both funds month by month and shows the total value.

An STP parks a lump sum in a low-risk fund and transfers a fixed amount into an equity fund each month, spreading the entry into the market like a SIP while the rest earns debt-fund returns.

The formula

Each month: both funds grow, then the transfer moves from source to target

Worked example

₹12 lakh in a debt fund at 7%, moving ₹1 lakh a month into an equity fund at 12%

  1. The debt fund is emptied in just over 12 months
  2. After 5 years: about ₹21.2 lakh, all in the equity fund

Things to keep in mind

  • Both returns are steady averages; equity returns in particular vary a lot.
  • Exit loads and tax on each transfer are not included.

Questions people ask

Why not invest the lump sum at once?

An STP reduces the risk of investing everything just before a fall.

Is each transfer taxed?

Yes, each transfer is a redemption from the source fund.

How long should an STP run?

Commonly 6 to 12 months; longer spreads the risk more but leaves money in the lower-return fund.

Sources