Total Transferred Amount
₹ 3,60,000
Source Fund Final Value
₹ 1,74,250
Target Fund Final Value
₹ 4,32,150
Total Portfolio Value
₹ 6,06,400
About the STP Calculator
Our free Systematic Transfer Plan (STP) Calculator helps mutual fund investors evaluate capital movement strategies by systematically transferring fixed amounts from a low-risk source fund (such as a liquid or debt fund) into a higher-risk target fund (such as an equity fund).
How STP Works and How It Is Calculated
An STP functions through monthly tranche transfers while simultaneously compounding the balances in both funds:
- Source Fund: Your initial lump-sum balance earns modest interest while monthly transfer amounts are systematically withdrawn.
- Target Fund: Receives regular monthly tranches that compound over time at the target return rate.
The mathematical projection accounts for monthly compounding in both compartments:
$$\text{Source Balance}_m = (\text{Source Balance}_{m-1} - \text{Transfer}) \times \left(1 + \frac{R_{\text{source}}}{1200}\right)$$
$$\text{Target Balance}_m = (\text{Target Balance}_{m-1} + \text{Transfer}) \times \left(1 + \frac{R_{\text{target}}}{1200}\right)$$
How to Use the Calculator
Simply adjust your investment parameters or interactive sliders:
- Initial Investment: The lump-sum amount deposited into the source fund.
- Monthly Transfer Amount: The fixed sum transferred to the target fund every month.
- Return Rates: Expected annual return rates for both the source and target funds.
- Time Period: The overall duration of the transfer plan in years.
Click the Calculate button to instantly view your total transferred funds, source and target final valuations, and overall portfolio value.
Frequently Asked Questions (FAQs)
What are the main benefits of using an STP?
An STP helps mitigate market volatility through rupee-cost averaging in equity funds while ensuring your idle cash earns returns in a secure debt or liquid fund rather than sitting in a low-yield savings account.
Are there tax implications when transferring via STP?
Yes, each transfer from the source fund is treated as a redemption (withdrawal), meaning capital gains tax rules apply depending on whether the source fund is debt or equity and your holding period.
Can an STP be stopped or modified midway?
Yes, most mutual fund houses permit investors to modify transfer amounts, change target funds, or cancel an active STP at any time without exit load penalties (after completing any applicable lock-in or minimum holding periods).
