A Systematic Transfer Plan (STP) in mutual funds is a strategy where an investor transfers a fixed or variable amount of money systematically from one mutual fund scheme (Source Scheme) to another mutual fund scheme (Target Scheme) within the same fund house. This transfer usually happens at regular intervals, such as daily, weekly, fortnightly, monthly or quarterly.
The main purpose of employing an STP is to manage risk and optimize returns by gradually shifting investments from one type of fund to another. For instance, an investor might start with a lump sum investment in a debt fund and then set up an STP to transfer a fixed amount regularly to an equity fund. This strategy helps in reducing the impact of market volatility by averaging the cost of investment over time.
Unlike SIP, Investor gives lump sum amount to one of liquid scheme or debt scheme (Source Scheme), where investor has the chances of getting higher return then the Saving Bank account, and switch a fixed or variable amount to the another scheme, usually in equity scheme (Target Scheme).
STP is suitable for the investor who has the lump sum money for the investment, but wises to invest in staggered manner so that he/she can be benefited from the rupee cost averaging & volatility of the market.
Flexi STP: As the name suggests, the flexi STP option offers flexibility to the investor in regard to the transfer amount. The investor can choose a variable amount to move from the source fund to the target fund. The choice can be made based on market fluctuations. Investors usually use this option during a volatile market. If the Net Asset Value (NAV) of the target fund decreases, investors transfer more funds to get a higher number of units, and vice versa.
Profit Transfer STP: this plan, the capital appreciation earned from one mutual fund scheme is transferred to another fund. The essential thing to note here is that this type of plan only moves the gains earned from market appreciation from the source fund to the destination fund, with the purpose of making higher returns. Investors can choose any of these options based on their risk appetite, financial goals, and expertise. Profit Transfer STP options may be suitable for investors who are keen to protect the Initial Investment amount, but wishes to make returns more than the Fixed Deposit or Debt Fund.
Initial Investment in Source Scheme | ₹1,000,000 | |||
Rate of Return in Source Scheme | 7% | |||
STP Amount to Target Scheme | ₹10,000 | |||
Rate of return in Target Scheme | 15% | |||
Total Valuation at End | ₹3,976,633 | |||
Newsletter | Investment in Source Scheme Outstanding | Month end Value in Source Scheme | Investment in Target Scheme | Value in Target Scheme |
---|---|---|---|---|
1 | ₹1,000,000 | ₹1,005,654 | ₹10,000 | ₹10,000 |
2 | ₹995,654 | ₹1,001,284 | ₹10,000 | ₹20,234 |
3 | ₹991,284 | ₹996,889 | ₹10,000 | ₹30,588 |
4 | ₹986,889 | ₹992,469 | ₹10,000 | ₹41,064 |
5 | ₹982,469 | ₹988,024 | ₹10,000 | ₹51,662 |
6 | ₹978,024 | ₹983,554 | ₹10,000 | ₹62,385 |
7 | ₹973,554 | ₹979,058 | ₹10,000 | ₹73,233 |
8 | ₹969,058 | ₹974,537 | ₹10,000 | ₹84,208 |
9 | ₹964,537 | ₹969,991 | ₹10,000 | ₹95,311 |
10 | ₹959,991 | ₹965,419 | ₹10,000 | ₹106,545 |
11 | ₹955,419 | ₹960,821 | ₹10,000 | ₹117,910 |
12 | ₹950,821 | ₹956,197 | ₹10,000 | ₹129,409 |
13 | ₹946,197 | ₹951,547 | ₹10,000 | ₹141,042 |
14 | ₹941,547 | ₹946,871 | ₹10,000 | ₹152,811 |
15 | ₹936,871 | ₹942,168 | ₹10,000 | ₹164,719 |
16 | ₹932,168 | ₹937,438 | ₹10,000 | ₹176,765 |
17 | ₹927,438 | ₹932,682 | ₹10,000 | ₹188,953 |
18 | ₹922,682 | ₹927,899 | ₹10,000 | ₹201,284 |
19 | ₹917,899 | ₹923,089 | ₹10,000 | ₹213,759 |
20 | ₹913,089 | ₹918,252 | ₹10,000 | ₹226,381 |
21 | ₹908,252 | ₹913,387 | ₹10,000 | ₹239,150 |
22 | ₹903,387 | ₹908,495 | ₹10,000 | ₹252,069 |
23 | ₹898,495 | ₹903,575 | ₹10,000 | ₹265,139 |
24 | ₹893,575 | ₹898,628 | ₹10,000 | ₹278,362 |
25 | ₹888,628 | ₹893,652 | ₹10,000 | ₹291,740 |
26 | ₹883,652 | ₹888,649 | ₹10,000 | ₹305,275 |
27 | ₹878,649 | ₹883,617 | ₹10,000 | ₹318,968 |
28 | ₹873,617 | ₹878,556 | ₹10,000 | ₹332,822 |
29 | ₹868,556 | ₹873,467 | ₹10,000 | ₹346,838 |
30 | ₹863,467 | ₹868,349 | ₹10,000 | ₹361,019 |
31 | ₹858,349 | ₹863,202 | ₹10,000 | ₹375,365 |
32 | ₹853,202 | ₹858,025 | ₹10,000 | ₹389,879 |
33 | ₹848,025 | ₹852,819 | ₹10,000 | ₹404,563 |
34 | ₹842,819 | ₹847,583 | ₹10,000 | ₹419,418 |
35 | ₹837,583 | ₹842,317 | ₹10,000 | ₹434,446 |
36 | ₹832,317 | ₹837,022 | ₹10,000 | ₹449,650 |
36 | ₹832,317 | ₹837,022 | ₹10,000 | ₹449,650 |
37 | ₹827,029 | ₹831,705 | ₹10,000 | ₹465,043 |
38 | ₹821,705 | ₹826,351 | ₹10,000 | ₹480,608 |
39 | ₹816,351 | ₹820,967 | ₹10,000 | ₹496,355 |
40 | ₹810,967 | ₹815,552 | ₹10,000 | ₹512,287 |
41 | ₹805,552 | ₹810,107 | ₹10,000 | ₹528,406 |
42 | ₹800,107 | ₹804,631 | ₹10,000 | ₹544,713 |
43 | ₹794,631 | ₹799,124 | ₹10,000 | ₹561,212 |
44 | ₹789,124 | ₹793,586 | ₹10,000 | ₹577,903 |
45 | ₹783,586 | ₹788,016 | ₹10,000 | ₹594,791 |
46 | ₹778,016 | ₹782,415 | ₹10,000 | ₹611,876 |
47 | ₹772,415 | ₹776,782 | ₹10,000 | ₹629,161 |
48 | ₹766,782 | ₹771,118 | ₹10,000 | ₹646,649 |
49 | ₹761,118 | ₹765,421 | ₹10,000 | ₹664,341 |
50 | ₹755,421 | ₹759,693 | ₹10,000 | ₹682,241 |
51 | ₹749,693 | ₹753,931 | ₹10,000 | ₹700,351 |
52 | ₹743,931 | ₹748,138 | ₹10,000 | ₹718,672 |
53 | ₹738,138 | ₹742,311 | ₹10,000 | ₹737,209 |
54 | ₹732,311 | ₹736,452 | ₹10,000 | ₹755,962 |
55 | ₹726,452 | ₹730,559 | ₹10,000 | ₹774,935 |
56 | ₹720,559 | ₹724,634 | ₹10,000 | ₹794,131 |
57 | ₹714,634 | ₹718,674 | ₹10,000 | ₹813,551 |
58 | ₹708,674 | ₹712,681 | ₹10,000 | ₹833,199 |
59 | ₹702,681 | ₹706,654 | ₹10,000 | ₹853,077 |
60 | ₹696,654 | ₹700,593 | ₹10,000 | ₹873,188 |
61 | ₹690,593 | ₹694,498 | ₹10,000 | ₹893,534 |
62 | ₹684,498 | ₹688,368 | ₹10,000 | ₹914,119 |
63 | ₹678,368 | ₹682,204 | ₹10,000 | ₹934,945 |
64 | ₹672,204 | ₹676,004 | ₹10,000 | ₹956,015 |
65 | ₹666,004 | ₹669,770 | ₹10,000 | ₹977,332 |
66 | ₹659,770 | ₹663,501 | ₹10,000 | ₹998,898 |
67 | ₹653,501 | ₹657,196 | ₹10,000 | ₹1,020,718 |
68 | ₹647,196 | ₹650,855 | ₹10,000 | ₹1,042,792 |
69 | ₹640,855 | ₹644,478 | ₹10,000 | ₹1,065,126 |
70 | ₹634,478 | ₹638,066 | ₹10,000 | ₹1,087,721 |
71 | ₹628,066 | ₹631,617 | ₹10,000 | ₹1,110,580 |
72 | ₹621,617 | ₹625,132 | ₹10,000 | ₹1,133,708 |
73 | ₹615,132 | ₹618,610 | ₹10,000 | ₹1,157,106 |
74 | ₹608,610 | ₹612,051 | ₹10,000 | ₹1,180,779 |
75 | ₹602,051 | ₹605,455 | ₹10,000 | ₹1,204,729 |
76 | ₹595,455 | ₹598,822 | ₹10,000 | ₹1,228,959 |
77 | ₹588,822 | ₹592,151 | ₹10,000 | ₹1,253,474 |
78 | ₹582,151 | ₹585,443 | ₹10,000 | ₹1,278,275 |
79 | ₹575,443 | ₹578,696 | ₹10,000 | ₹1,303,367 |
80 | ₹568,696 | ₹571,912 | ₹10,000 | ₹1,328,753 |
81 | ₹561,912 | ₹565,089 | ₹10,000 | ₹1,354,436 |
82 | ₹555,089 | ₹558,227 | ₹10,000 | ₹1,380,421 |
83 | ₹548,227 | ₹551,327 | ₹10,000 | ₹1,406,709 |
84 | ₹541,327 | ₹544,388 | ₹10,000 | ₹1,433,306 |
85 | ₹534,388 | ₹537,409 | ₹10,000 | ₹1,460,214 |
86 | ₹527,409 | ₹530,392 | ₹10,000 | ₹1,487,438 |
87 | ₹520,392 | ₹523,334 | ₹10,000 | ₹1,514,980 |
88 | ₹513,334 | ₹516,236 | ₹10,000 | ₹1,542,845 |
89 | ₹506,236 | ₹509,099 | ₹10,000 | ₹1,571,036 |
90 | ₹499,099 | ₹501,921 | ₹10,000 | ₹1,599,558 |
91 | ₹491,921 | ₹494,702 | ₹10,000 | ₹1,628,414 |
92 | ₹484,702 | ₹487,443 | ₹10,000 | ₹1,657,608 |
93 | ₹477,443 | ₹480,142 | ₹10,000 | ₹1,687,144 |
94 | ₹470,142 | ₹472,800 | ₹10,000 | ₹1,717,026 |
95 | ₹462,800 | ₹465,417 | ₹10,000 | ₹1,747,258 |
96 | ₹455,417 | ₹457,992 | ₹10,000 | ₹1,777,844 |
97 | ₹447,992 | ₹450,525 | ₹10,000 | ₹1,808,788 |
98 | ₹440,525 | ₹443,016 | ₹10,000 | ₹1,840,094 |
99 | ₹433,016 | ₹435,464 | ₹10,000 | ₹1,871,766 |
100 | ₹425,464 | ₹427,870 | ₹10,000 | ₹1,903,808 |
101 | ₹417,870 | ₹420,233 | ₹10,000 | ₹1,936,234 |
102 | ₹410,233 | ₹412,552 | ₹10,000 | ₹1,969,034 |
103 | ₹402,552 | ₹404,828 | ₹10,000 | ₹2,002,218 |
104 | ₹394,828 | ₹397,061 | ₹10,000 | ₹2,035,791 |
105 | ₹387,061 | ₹389,249 | ₹10,000 | ₹2,069,757 |
106 | ₹379,249 | ₹381,393 | ₹10,000 | ₹2,104,121 |
107 | ₹371,393 | ₹373,493 | ₹10,000 | ₹2,138,888 |
108 | ₹363,493 | ₹365,549 | ₹10,000 | ₹2,174,062 |
109 | ₹355,549 | ₹357,559 | ₹10,000 | ₹2,209,648 |
110 | ₹347,559 | ₹349,524 | ₹10,000 | ₹2,245,651 |
111 | ₹339,524 | ₹341,444 | ₹10,000 | ₹2,282,076 |
112 | ₹331,444 | ₹333,318 | ₹10,000 | ₹2,318,928 |
113 | ₹323,318 | ₹325,146 | ₹10,000 | ₹2,356,211 |
114 | ₹315,146 | ₹316,928 | ₹10,000 | ₹2,393,931 |
115 | ₹306,928 | ₹308,663 | ₹10,000 | ₹2,432,093 |
116 | ₹298,663 | ₹300,352 | ₹10,000 | ₹2,470,701 |
117 | ₹290,352 | ₹291,994 | ₹10,000 | ₹2,509,763 |
118 | ₹281,994 | ₹283,588 | ₹10,000 | ₹2,549,281 |
119 | ₹273,588 | ₹275,135 | ₹10,000 | ₹2,589,263 |
120 | ₹265,135 | ₹266,634 | ₹10,000 | ₹2,629,713 |
121 | ₹256,634 | ₹258,085 | ₹10,000 | ₹2,670,637 |
122 | ₹248,085 | ₹249,488 | ₹10,000 | ₹2,712,041 |
123 | ₹239,488 | ₹240,842 | ₹10,000 | ₹2,753,929 |
124 | ₹230,842 | ₹232,147 | ₹10,000 | ₹2,796,309 |
125 | ₹222,147 | ₹223,403 | ₹10,000 | ₹2,839,184 |
126 | ₹213,403 | ₹214,610 | ₹10,000 | ₹2,882,562 |
127 | ₹204,610 | ₹205,767 | ₹10,000 | ₹2,926,448 |
128 | ₹195,767 | ₹196,874 | ₹10,000 | ₹2,970,849 |
129 | ₹186,874 | ₹187,930 | ₹10,000 | ₹3,015,769 |
130 | ₹177,930 | ₹178,936 | ₹10,000 | ₹3,061,216 |
131 | ₹168,936 | ₹169,891 | ₹10,000 | ₹3,107,195 |
132 | ₹159,891 | ₹160,795 | ₹10,000 | ₹3,153,712 |
133 | ₹150,795 | ₹151,648 | ₹10,000 | ₹3,200,775 |
134 | ₹141,648 | ₹142,449 | ₹10,000 | ₹3,248,389 |
135 | ₹132,449 | ₹133,198 | ₹10,000 | ₹3,296,561 |
136 | ₹123,198 | ₹123,894 | ₹10,000 | ₹3,345,297 |
137 | ₹113,894 | ₹114,538 | ₹10,000 | ₹3,394,604 |
138 | ₹104,538 | ₹105,129 | ₹10,000 | ₹3,444,488 |
139 | ₹95,129 | ₹95,667 | ₹10,000 | ₹3,494,957 |
140 | ₹85,667 | ₹86,152 | ₹10,000 | ₹3,546,018 |
141 | ₹76,152 | ₹76,582 | ₹10,000 | ₹3,597,676 |
142 | ₹66,582 | ₹66,959 | ₹10,000 | ₹3,649,940 |
143 | ₹56,959 | ₹57,281 | ₹10,000 | ₹3,702,816 |
144 | ₹47,281 | ₹47,548 | ₹10,000 | ₹3,756,311 |
145 | ₹37,548 | ₹37,760 | ₹10,000 | ₹3,810,433 |
146 | ₹27,760 | ₹27,917 | ₹10,000 | ₹3,865,189 |
147 | ₹17,917 | ₹18,019 | ₹10,000 | ₹3,920,587 |
148 | ₹80,19 | ₹8,064 | ₹10,000 | ₹3,976,633 |